Redfin: All-Cash Purchases Drop in December

(Image courtesy of Sergei Starostin/pexels.com)

Redfin, Seattle, released a new report finding that only 29% of homes were bought with cash in December, down from 30.3% a year earlier. That’s also the lowest December share since 2020.

The share of homebuyers purchasing in cash hit a peak of 35% in late 2023, as buyers tried to avoid higher interest rates.

Slightly lower rates and a strong buyer’s market have led to fewer all-cash payments.

However, many buyers are still going that route. “The leverage buyers have when they pay in cash is unbelievable,” said Amanda Peterson, a Redfin Premier real estate agent in Dallas. “It’s not uncommon to see a buyer score a home for 10-20% below the appraised value if they offer cash.”

All cash purchases were most prevalent in West Palm Beach, Fla., at 47.2%. Next was Jacksonville, Fla., at 39.3% and Miami, also at 39.3%.

They were least prevalent in Seattle, at 17.3%, Oakland, Calif., at 18.5% and Sacramento, at 19.6%.

Parsing routes buyers are using further, the share of homebuyers using FHA loans fell slightly in December. Only one in seven buyers (or 14.4%) used FHA loans, down from 15.1% a year earlier and the lowest December share since 2021.

Conventional loans were 78.6% of the share in December, up from 78.2% in December 2024 and the highest in the month since 2021. VA loans were 7% of home purchases in December, up narrowly from 6.8% the year before.