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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 74 December 2025 J O U R N A L But light capital requirements can be problematic. The Stoop said that orga- nizations with concentrated risk, such as mortgage assets, are subject to higher levels of instability, while diversification of mortgage assets across the broader banking and financial system would have been considerably more stable. Those specialized mortgage insti- tutions were vulnerable, however, as large losses could rapidly escalate into a crisis. The Enduring 'American Mortgage' Layton also detailed how, after World War II, the standard U.S. mortgage became what is now known internationally as the "American mort- gage." The Stoop says that this type of mortgage is notable for its long-term repayment period, which, at first, was set at 15 years but in the 1960s was standardized at 30 years and by a fixed interest rate for the same time period. Borrowers could make prepayments at any time for any reason without penalty. That is an extremely borrow- er-friendly structure that grew out of a government agency that did not need to worry about liquidity or interest rate risk. However, when this same structure became standard for private sector lenders after World War II, the resulting liquidity and interest rate risk became quite problematic, The Stoop said. "Simply put, at that time, no lender funded by deposits or the debt markets had access to funds to match the liquidity or interest rate risk profile of a balance sheet dominated by Amer- ican-style mortgages. Instead, those institutions would be short-funded, creating a tremendous concentration of interest rate and liquidity risk, a source of potential major financial instability." Part 2 of the series will look at F&F's undue concentration of mortgage credit risk and how that risk was on a path to substantial containment that started in 2013, but because of a combination of intended and unintended consequenc- es, began to head in the wrong direction around 2020. GEN Z AND MILLENNIALS GAIN GROUND IN HOMEOWNERSHIP AS MARKET SHIFTS E ven though everyone comes at various times, homeownership unites generations, according to new data from First American. In light of this, experts looked at the generation- al composition of this year's homeown- ership table and how the seating chart is changing using the most recent 2025 Current Population Survey microdata. It was discovered that the housing market is changing, with younger generations quickly gaining seats while elderly homeowners continue to hold the ma- jority of them. Home purchases are rarely made in a vacuum. Usually, life's pivotal events— marriage, having children, changing careers, or just the need for additional space—are what cause it. When aspira- tion turns into action, it is determined by economic factors like supply, afford- ability, and mortgage rates, but life itself is nearly always the initial spark. In their late 20s or early 30s, baby boomers and Gen Xers frequently bought homes since they were married, had children, and established careers earlier in life. In contrast, millennials and Gen Z have spent more time in school and developing their jobs. They also confront substantial financial chal- lenges and a limited supply of property, which has caused them to postpone marriage, kids, and, consequently, their first home purchase. Approximately half of Gen Xers and boomers owned a home by the age of 30. Gen Z seems to be following the same path as millennials, who didn't reach that milestone until they were 33. Millennials, the largest and most educated generation in U.S. history and once branded "forever renters," are rapidly buying homes in their 30s and reaching parity with Gen X by their ear- ly 40s, proving the dream of homeown- ership wasn't dashed, just delayed. Due to pay increases, flexible remote work schedules, and cheap borrowing prices during the epidemic, Gen Z—the newest generation at the homeown- ership table—was able to purchase homes earlier than earlier generations. By the age of 28, Gen Z is 1.7 percentage points ahead of millennials, and their early-20s ownership rate surpasses that of previous cohorts. This early strength indicates that their ownership curve may be on par with, or possibly surpass, that of millennials in their early 30s for a generation still in their 20s. Not to be overlooked, Gen X, the "middle child" of the housing market, is also hitting new benchmarks. The gap between Gen Xers and boomers, who began in their 40s and 50s during the Great Financial Crisis, is closing as the oldest Gen Xers reach their 60s. They are only behind 1.7 percentage points, and the gap is less every year. Boomers, whose ownership rates stay high well into their 70s, may pro- vide millennials and Gen Z with one last generational boost. Aging in place has reduced turnover, but as more boomers reach their 80s, senior-living transitions and life-stage movements will progres- sively bring back well-located homes to the market, providing a demographic supply tailwind that could hasten the path to homeownership for younger purchasers. Homeownership has long stood for more than just real estate; it also symbolizes family, relationships, and life-changing events. Millennials and Gen Z remind us that although the path to homeownership may take longer to achieve, the destination is still the same, even though boomers and Gen X may have become homeowners earlier. As Gen Z completes its 20s and millennials enter their late 30s and early 40s, the forecast provides a strong foundation for younger generations to catch up, with affordability increasing, inventory loosening, and buyer activity gradually gaining speed into 2026.