Veterans United Home Loans reports that the volume of mortgages backed by the Department of Veterans Affairs (VA) reached a new high in the fiscal year 2021, with particular growth among younger borrowers.

According to a blog post by Chris Birk, vice president of mortgage insight and director of education at Veterans United Home Loans, the millennial generation and Gen Z veterans accounted for nearly half of all VA purchase loans. Gen Z is especially gaining traction across the nation.

The volume of VA-sponsored loans rose to 1.44 million this fiscal year, up 15.6% from 1.25 million the previous year, while the average loan amount increased to $310,174 from $301,044. 

Refinances accounted for 69.2% of all originations in the reporting period, while purchases accounted for 30.8%.

In 2010, VA purchase mortgages saw their 10th consecutive year of growth. Despite record home prices, the percentage of young borrowers taking advantage of the VA's loan program increased annually. 

As of fiscal 2021, 52% of all VA purchase mortgages were taken out by millennials and Gen Z veterans, up 6.6% from 2020. There were more millennials than Gen Z homebuyers, but the number of Gen Z borrowers taking out VA purchase loans increased by 84%.

Virginia Beach, where the most active-duty military members in the country, made up the most significant share of these new purchases. Millennials and Generation Z veterans in the area applied for 10,477 VA-backed loans, up 22.8% from 8,532 applications in the prior fiscal year. 

Millennials and Gen Z purchased Virginia Beach homes at a rate of over 20%, while 22 communities across the country experienced growth of more than 10%. 

Smaller military communities saw the most significant development in home sales, such as Hinesville-Fort Stewart, Georgia, with a 64.8% increase, Anchorage, Alaska, with a 28.3% increase, and Savannah, Georgia, with a 26.1% increase.

Even though first-time buyers have an average age of 33 (up 14% since 1981), millennials constitute the largest generation of adults in the United States, driving home purchases last year. 

According to a recent survey conducted by Hometap, millennial homeowners do not realize that their homes contain tappable equity.