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can someone help?
Hi @Jaimez5c,
Welcome to the community. I am sorry to hear about the issue you are having with your Z5 Compact.
Do you happen to have a case or a screen protector on the phone? Sometimes they can interfere with the touch.
Tempered glass protectors are quite thick so it could be an issue. I understand removing it is a bit of trouble, but as a test I would recommend you try.
You can also test under Settings > About Phone > Diagnostics > Test > Touch screen.
That means that the issue is caused by a third party application as Safe mode starts your phone with only pre-installed apps loaded. Now it's a matter of identifying what application is causing the issue.
The very first thing to do is make sure your apps are all up to date in the play store. If they are, you can uninstall apps one by one and test after each until you identify the problem.
If you factory reset it, it will not revert back to lollipop, no. If you do wish to go that route I would recommend you back up your phone and perform a software repair using Xperia Companion instead, as this will completely re-install Android. More extreme but will provide better results.