{"id":937117,"date":"2026-02-16T08:34:08","date_gmt":"2026-02-16T13:34:08","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/all-cash-home-purchases-ended-2025-at-five-year-low\/"},"modified":"2026-02-16T08:34:08","modified_gmt":"2026-02-16T13:34:08","slug":"all-cash-home-purchases-ended-2025-at-five-year-low","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/all-cash-home-purchases-ended-2025-at-five-year-low\/","title":{"rendered":"All-Cash Home Purchases Ended 2025 at Five-Year Low"},"content":{"rendered":"

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All-Cash Home Purchases Ended 2025 at Five-Year Low<\/b><\/p>\n

Redfin reports 29% of homebuyers paid with cash in December\u2014the lowest share for that month since 2020<\/i><\/p>\n

SEATTLE–(BUSINESS WIRE<\/a>)–
\nJust under 3 in 10 (29%) U.S. homebuyers paid in all cash in December, down from 30.3% a year earlier and the lowest December share since 2020. That\u2019s according to a new report<\/a> by Redfin<\/a>, the real estate brokerage powered by Rocket.<\/p>\n

\nThe share of homebuyers paying in cash peaked at nearly 35% in late 2023 because mortgage rates peaked in the high-7% range around that time. Buyers were inclined to pay in cash\u2014if they could afford it\u2014to avoid high monthly interest payments.<\/p>\n

\nWhen mortgage rates came down from their peak, all-cash payments became less common, as lower rates meant lower<\/a> interest payments. The average 30-year-fixed mortgage rate currently sits at 6.09%.<\/p>\n

\nAnother reason the share of buyers paying in cash has declined: It\u2019s the strongest<\/a> buyer\u2019s market<\/a> in recent history. Sellers outnumber buyers by a record 47%, giving the buyers who are in the market negotiating power. Buyers aren\u2019t facing much competition, which means they don\u2019t have to pull out all of the stops (such as offering all cash and waiving contingencies) to woo sellers like they did during the pandemic homebuying frenzy.<\/p>\n

\nWhile most buyers today don\u2019t need to pay in cash to win a home, paying in cash can still help buyers get better deal terms. Sellers in some areas\u2014especially Texas<\/a> and Florida\u2014are watching their homes sit on the market for months without showings. That makes cash deals all the more attractive because they typically close faster than deals in which the buyer takes out a loan.<\/p>\n

\n\u201cThe leverage buyers have when they pay in cash is unbelievable,\u201d said Amanda Peterson<\/a>, a Redfin Premier<\/a> real estate agent in Dallas<\/a>. \u201cIt\u2019s not uncommon to see a buyer score a home for 10-20% below the appraised value if they offer cash.\u201d<\/p>\n

Share of Buyers Using FHA Loans Falls to Four-Year Low<\/b><\/p>\n

\nRoughly 1 in 7 (14.4%) homebuyers who took out mortgages used FHA loans in December, down from 15.1% a year earlier and the lowest December share since 2021.<\/p>\n

FHA loans<\/a> are insured by the U.S. government and meant for low-to-moderate-income borrowers. They\u2019re popular with first-time homebuyers because they have lower financial requirements than conventional loans; typically, they require a 3.5% down payment.<\/p>\n

\n\u201cA lot of homebuyers\u2014especially FHA buyers\u2014are getting cold feet<\/a> when they see the actual monthly payment and the amount of money they need to bring to the table at closing,\u201d said John Tomlinson<\/a>, a Redfin Premier real estate agent in Fort Lauderdale, FL<\/a>. \u201cThey may only have a 3.5% down payment, but with prepaid taxes and mortgage insurance, closing costs can be $20,000\u2013$30,000. Rising HOA fees are adding insult to injury.\u201d<\/p>\n

\nOne might expect to see an uptick in the share of buyers using FHA loans given that housing costs are high and homebuyer competition is low. But FHA loans may actually be on the decline because housing costs are high. Many low-to-moderate-income Americans\u2014the population that typically uses FHA loans\u2014have been priced out of the housing market. That may explain why we\u2019re seeing a rising share of buyers using conventional loans.<\/p>\n

\nOver three-quarters (78.6%) of mortgaged homebuyers used conventional loans in December, up slightly from 78.2% a year earlier and the highest December share since 2021.<\/p>\n

\nIt’s worth noting that FHA mortgage rates have declined this month and are lower than the typical 30-year-fixed rate, which may bring more FHA buyers off the sidelines.<\/p>\n

VA loans<\/a>, which are available to veterans, service members and their surviving spouses, were used in 7% of mortgaged home purchases in December, up very slightly from 6.8% a year earlier. VA loans require little to no down payment. You can read more about the recent uptick in VA loans here<\/a>.<\/p>\n

Metro-Level Highlights<\/b><\/p>\n

The data below represents December 2025 and covers 38 of the most populous U.S. metros.<\/i><\/p>\n

All-cash purchases<\/b><\/p>\n