Housing Market Trends: Nearly 1 in 3 Buyers Still Opt for All-Cash Deals in 2025

The housing market can feel like a constantly shifting puzzle, and understanding the current housing market trends is crucial whether you're dreaming of buying your first home, selling your place, or just curious about your neighborhood's value. Right now, nearly 29% of U.S. homebuyers are still opting to pay with cash, a figure that has remained remarkably steady compared to last year, suggesting a resilient segment of the market even as other factors begin to shift.

This might sound like a lot of cash, and honestly, it is. But digging a little deeper reveals a more nuanced picture. I've spent years immersed in the world of real estate, watching cycles ebb and flow, and I can tell you that while cash is still king for a significant portion of buyers, it's not the whole story. In fact, if you're someone who relies on a mortgage, there's actually some encouraging news brewing.

Housing Market Trends: Nearly 1 in 3 Buyers Still Opt for All-Cash Deals in 2025

Why is Cash Still So Prevalent?

Before I dive into the reasons, let me share a thought. For a long time, we saw a surge in cash purchases. This was largely because mortgage rates skyrocketed, making borrowing money incredibly expensive. When you can avoid those hefty monthly interest payments, especially on the kind of money buying a home takes, paying cash just makes sense if you have it. Redfin's data from October 2025 shows that the peak for all-cash offers was in late 2023 and early 2024 when mortgage rates were hovering in the high 7% range.

Think about it: if you have the funds, why wouldn't you skip the interest and potentially secure a deal faster in a competitive market? It's a strategic move for many. However, as mortgage rates have started to dip – currently averaging around 6.27% – the allure of paying cash has lessened for some. Lower rates mean lower borrowing costs, which can make taking out a mortgage more attractive again.

Furthermore, the market has become a bit less frantic. We saw a significant cooling from its “red hot” phase. When there are fewer bidding wars and less pressure to “win” at all costs, buyers who need mortgages don't feel as compelled to fork over cash just to beat out someone else.

The Rising Tide of Down Payments

While the share of all-cash buyers is holding steady, another significant trend is the record-breaking median down payment. In August 2025, the typical U.S. homebuyer put down a whopping $70,000. That's a 6.1% increase from the previous year. In percentage terms, the median down payment now sits at 18.6% of the purchase price, the highest it's been in August since 2013.

Why the jump? Well, home prices have been climbing, so naturally, you need to put down more money when the overall cost is higher. However, Redfin's analysis shows that down-payment growth has actually outpaced home-price growth. This tells me something interesting is happening.

One key reason, in my experience, is that affluent buyers are playing a bigger role in the market. When housing costs are high, those with substantial financial resources are more likely to enter the market and make larger down payments. They can absorb a higher price point and still make a significant down payment. It's also possible some wealthier individuals are choosing to make large down payments rather than paying cash as mortgage rates have eased slightly.

Beyond the wealthy, I'm seeing a trend with “move-up” buyers. These are homeowners who are selling their current property and leveraging the equity they've built up to put a substantial down payment on their next home. This strategy can significantly lower their mortgage amount and monthly payments. Also, lenders themselves might be encouraging larger down payments to mitigate their risk in a market that still has some uncertainties.

A Welcome Shift for First-Time Buyers

This rise in larger down payments, combined with slightly lower mortgage rates and a less competitive market, is actually a breath of fresh air for many first-time homebuyers. Kathy Scott, a Redfin Premier agent in Phoenix, shared something I hear often: “First-time buyers have more opportunities than they did when the market was hot; they’re no longer competing against 10 other offers from people who are either paying in cash or shelling out a 50% down payment.”

This means buyers who are stretching to afford a home can breathe a little easier. They're not necessarily facing instant rejection if they can't compete with all-cash offers or massive down payments. They can take their time, find a home that truly fits their needs, and potentially even negotiate on price. Kathy's advice is spot-on: “Now is a great time to start building equity if you’re planning to stay in your new home for five to 10 years.”

However, I need to acknowledge that not everyone has significant cash reserves. Andrew Vallejo, another Redfin Premier agent in Austin, TX, highlights the other side of the coin: “the people who are buying are those who are financially comfortable, secure in their jobs, and have money ready and waiting in the bank for a down payment.” He shared an example of a buyer who liquidated stocks to make a $400,000 down payment on an $800,000 home. That's certainly a different reality for many.

But even with this trend, the flip side is also true. For some first-time buyers with more modest savings, perhaps $10,000 or $15,000, finding a home with a small down payment used to be nearly impossible. Now, in some areas, with less competition, these buyers are finding that their smaller down payments are more feasible.

Where the Trends Play Out: Metro-Level Snapshot

It's important to remember that the housing market isn't a one-size-fits-all phenomenon. Trends can vary wildly from city to city. Here’s a quick glimpse from the August 2025 data covering 40 major metro areas:

All-Cash Purchases:

• Highest Prevalence: West Palm Beach, FL (43.4%), Cleveland, OH (42.1%), Miami, FL (39.2%). These areas often see a strong presence of investors and buyers with significant liquid assets.
• Lowest Prevalence: Oakland, CA (18.8%), San Jose, CA (19.1%), Seattle, WA (20.5%). These are typically high-cost-of-living areas where even buyers with strong finances might opt for mortgages to spread the cost.
• Biggest Increases in Share: Baltimore, MD; Riverside, CA; Providence, RI. This suggests a growing segment of cash buyers in these particular metros.
• Biggest Declines in Share: Milwaukee, WI; New York, NY; Cincinnati, OH. This implies a shift towards more mortgage-dependent buyers in these locations.

Down Payments (in Dollars):

• Largest: San Jose, CA ($408,000), San Francisco, CA ($400,000), Anaheim, CA ($300,000). These are some of the priciest housing markets in the nation, demonstrating the sheer scale of investment required.
• Smallest: Virginia Beach, VA ($9,000), Pittsburgh, PA ($23,000), Cleveland, OH ($27,000). These areas represent more affordable markets where a smaller down payment can go a long way.
• Biggest Increases: Providence, RI; Chicago, IL; Washington, D.C. Markets where demand is strong and home prices are rising could be seeing larger down payments.
• Biggest Declines: Riverside, CA; Seattle, WA; Denver, CO. This could indicate a cooling market in these areas, or perhaps a shift towards smaller homes or first-time buyers.

Down Payments (in Percentage):

• Highest: Anaheim, CA (25%), San Francisco, CA (25%), San Jose, CA (25%). Again, in very expensive areas, buyers often need to put down a larger percentage to make the numbers work.
• Lowest: Virginia Beach, VA (3%), Las Vegas, NV (9.4%), Tampa, FL (9.8%). These markets often have more lenient down payment requirements for certain loan types.
• Biggest Increases in Percentage: Providence, RI; Orlando, FL; Columbus, OH. This points to buyers actively trying to reduce their loan principal, perhaps due to higher interest rates or a desire for lower monthly payments.
• Biggest Declines in Percentage: Miami, FL; Denver, CO; Warren, MI. This reversal could suggest a relaxation of down payment requirements or a shift in buyer demographics.

My Take: Navigating the Current Climate

From where I stand, the current housing market trends present a fascinating duality. On one hand, the persistence of cash purchases shows a deep pool of financially secure buyers still actively participating. On the other, the slight easing of mortgage rates and a less cutthroat environment offer renewed hope and opportunity for those who rely on financing.

For potential buyers, my advice has always been to get pre-approved for a mortgage and understand your budget thoroughly. Don't get discouraged by headlines. Focus on your local market. Talk to an experienced real estate agent who understands the nuances of your area. They can offer invaluable insights and guide you through the process, whether you're bringing cash to the table or seeking a mortgage.

For sellers, understanding these trends is equally important. If you're in a market where cash offers are common and robust, you might be able to expect a quicker sale. If your market is seeing more mortgage-dependent buyers, presentation, price, and flexibility might be key to attracting offers.