(NewsNation) — Rising mortgage rates, low inventory and high prices made 2023 a tough year to buy a home for civilians and veterans alike, but one group was more active in the housing market: Younger servicemembers.

VA purchase loans increased 15.5% among Generation Z veterans and service members in Fiscal Year 2023, according to a recent analysis by Veterans United Home Loans. Gen Zers — born between 1997 and 2012 (a portion of the generation is still too young to serve) — were the only age group that saw a year-over-year jump in VA purchase lending.

“The growth in home buying for Gen Z servicemembers and veterans is, in some ways, the lone bright spot of what was otherwise a really tough year for VA lending,” said Chris Birk, VP of Mortgage Insight at Veterans United Home Loans, the nation’s largest VA lender.

Government data shows the total number of VA-backed purchase loans fell by more than 20% last fiscal year — a sign that rising mortgage rates hit veterans hard despite their access to better loan terms.

VA home loans are provided by private lenders but backed by the federal government. They tend to have lower rates than conventional mortgages and don’t require a downpayment or private mortgage insurance.

Last fiscal year, Gen Z veterans and servicemembers accounted for 7.2% of all VA loans, more than double the year prior, Veterans United found. That share is likely to grow as more Gen Zers become old enough to serve and own a home.

For some, like 25-year-old U.S. Army Pvt. Juleynnie Estevez, the VA loan program was vital. After being homeless for several months, she and her husband were able to buy their first house in Killeen, Texas last fall.

“We wouldn’t have been able to have a home of our own if it weren’t for that benefit,” she said.

Like others who have tried to find a home in today’s housing market, Estevez said competition was the main challenge.

“Every home that we kept an eye on was gone quickly,” she said. “In less than a week, we were like, ‘Let’s look at this house’ and at the end of the week the house was already gone.”

Today, a 30-year fixed rate VA home loan is around 6.5%, down from 7.5% in October but still more than double the average rate just three years ago, according to Optimal Blue.

But thanks to moderating inflation and better mortgage rates, veterans are starting to feel better about their homebuying prospects than just a few months ago.

Among veterans who are planning to buy a home, 37% intend to do so over the next six months — up 10 percentage points from the previous quarter, according to a Veterans United survey near the end of last year.

As to why Gen Z veterans and servicemembers are buying more homes, there are a few explanations.

For one, they’re getting older and that means more are settling down and looking to buy. They’re also searching in markets where other young people are finding success.

Cities like San Antonio, Texas, Jacksonville, Florida and Colorado Springs, Colorado recently ranked among the top cities for Gen Z homebuyers. All three of those areas saw some of the most VA purchase loans among Gen Zers last year.

Higher rent prices could also be pushing more young servicemembers to buy, Birk noted.

Since the original G.I. Bill in 1944, the VA has guaranteed more than 28 million loans but surveys suggest many young people don’t know the home loan program exists.

A March 2022 “Know Your Army” survey found that only 34% of respondents in the Gen Z age group knew about the VA home loan benefits.

That’s a number the Army will be hoping to boost as the military continues to face a shortage of recruits.