As mortgage rates continue to fall and buyers continue to have the upper hand in most markets across the country, many people are refusing to pay cash for a home.
As mortgage rates fall, fewer buyers are considering cash as an attractive way to purchase a home.
Only 29% of buyers paid cash for a home in December 2025, the lowest percentage for a December since 2020, according to a Redfin analysis of the 38 most populous metros in the United States.
As of December 2024, 30.3% of homebuyers paid in cash, but the proportion of all-cash buyers reached almost 35% in 2023 as mortgage rates also reached high 7% ranges and buyers sought to avoid paying interest at higher rates.
With real estate currently in its strongest buyer’s market for a long time, the number of cash buyers is also decreasing. Therefore, with the number of sellers outnumbering buyers, buyers do not have to work as hard to acquire properties through the extreme tactics of the pandemic market, such as offering cash payments or waiving inspections.
Still, sellers are very eager to sell properties in this market, so buyers who pay cash now may be able to get a better deal.
“The leverage a buyer has when paying cash is incredible,” Dallas Redfin Premier agent Amanda Peterson said in a Redfin report. “If a buyer offers cash, it is not uncommon to purchase a home for 10 to 20 percent less than the appraised value.”
West Palm Beach, Florida had the most cash purchases in December, with 47.2% of buyers paying cash. After that, Jacksonville, Fla., and Miami, Fla. had the most cash purchases, with 39.3% of buyers paying cash.
Seattle, Washington has the lowest number of cash buyers (17.3% of buyers). Oakland, California (18.5%) and Sacramento, California (19.6%).
Down payments for home buyers with a mortgage were $64,000 in December, down 1.5% from the same month last year. This is because buyers tend to reduce their down payments due to rising home purchase costs and increased market leverage.
That month, the typical homebuyer paid 15.2 percent of a home’s sale price, compared to 16.7 percent a year earlier.
A separate Redfin report said the down payment decline was the first in the past five months.
The decline in down payments is just the latest sign that buyers are strapped for cash while gaining an edge in the market.
“The decline in down payments may be due in part to Americans seeking more affordable housing due to higher prices, rising mortgage rates, and economic uncertainty,” Sheharyar Bokhari, Redfin’s chief economist, said in the company’s report. “Sellers usually prefer buyers who make a big down payment because it signals financial stability. But in today’s market, sellers don’t have much say. There are more homes for sale than people looking to buy, so buyers have the power to negotiate.”
Mortgage rates are currently near their lowest levels since 2022, which could prompt more buyers to return to the market this year.
The sharpest decline in median down payments was in Orlando, Florida, where they fell 23.9% in December compared to the same month last year. Cincinnati, Ohio (-22.6%) and Atlanta, Georgia (-18.9%) had the second and third largest declines.
Meanwhile, the city with the largest year-over-year increase in median down payments was Cleveland, Ohio, which increased by 31.7%. The next largest annual increases were in Providence, Rhode Island (up 20.4%) and Baltimore, Maryland (up 20%).
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