FHA loans are U.S. government‑insured mortgages designed to let buyers qualify with smaller down payments and more flexible credit standards than many conventional loans. They matter to investors because changes in FHA lending affect homebuying demand, the health of banks and mortgage companies, and the risk and supply of mortgage-related securities—like a safety net that makes the housing market accessible to more people and shifts where money flows in the housing sector.
va loansfinancial
VA loans are home mortgages guaranteed by the U.S. Department of Veterans Affairs for eligible military veterans, active-duty service members, reservists and certain surviving spouses. They matter to investors because the government guarantee reduces lender risk and can boost housing demand for eligible buyers; that influence changes the size and risk profile of mortgage lending, mortgage-backed securities and banks’ loan portfolios—similar to how an insurance policy makes lenders more willing to lend.
conventional loansfinancial
Conventional loans are home mortgage loans made by private lenders that are not guaranteed by government programs; think of them as the off-the-shelf mortgage compared with government-backed alternatives. They matter to investors because their terms, default risk and underwriting standards influence housing demand, interest-rate sensitivity and the value of mortgage-related investments such as mortgage-backed securities—similar to how the quality of ingredients affects the price and shelf life of a packaged product.
30-year-fixed mortgage ratefinancial
A 30-year-fixed mortgage rate is the annual interest charged on a home loan where the interest rate and monthly payment stay the same for the full 30-year term, like a long-term subscription with a steady monthly bill. Investors watch it because it influences homebuying, refinancing activity, consumer spending and the value of mortgage-backed securities and interest-rate sensitive stocks—shifts in this rate can ripple through housing markets and the wider economy.
down paymentfinancial
An initial upfront payment made by a buyer when purchasing a high-cost item—like a house, car, or large service—intended to cover part of the total price and reduce the amount financed. Think of it as a security deposit that shows commitment and lowers the lender’s risk; larger down payments typically mean smaller loans, lower monthly payments, and less chance of default. For investors, average down payment sizes signal buyers’ financial health, influence a lender’s credit exposure, and affect short‑term cash flow and long‑term demand in financing‑dependent markets.
mortgage insurancefinancial
Insurance that steps in to cover a lender’s losses if a homebuyer stops paying their mortgage, commonly paid for by the borrower as a regular premium or upfront fee; think of it as a backup guarantor that protects the lender, not the homeowner. Investors care because mortgage insurance lowers the risk and potential losses on mortgage loans and related securities, influences loan pricing and bank balance sheets, and thus affects returns and perceived safety of housing-related investments.
hoa feesfinancial
Regular charges paid by owners in a shared-property community to a homeowners association (HOA) to fund maintenance, insurance, utilities for common areas, reserve funds and rule enforcement. For investors, HOA fees act like ongoing membership dues that reduce net rental income, affect cash flow and resale value, and signal how well common assets and risks are managed—higher or unstable fees can eat into returns or change a property’s marketability.
appraised valuefinancial
Appraised value is an expert’s estimate of what an asset—such as property, equipment, or a business unit—is worth at a given moment, based on inspection and comparison to similar items. For investors it matters because that estimate helps set sale prices, loan collateral limits and accounting values, acting like a trusted opinion on worth the way a home inspection guides a buyer’s offer.
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Redfin reports 29% of homebuyers paid with cash in December—the lowest share for that month since 2020
SEATTLE--(BUSINESS WIRE)--
Just 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’s according to a new report by Redfin, the real estate brokerage powered by Rocket.
The 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—if they could afford it—to avoid high monthly interest payments.
When mortgage rates came down from their peak, all-cash payments became less common, as lower rates meant lower interest payments. The average 30-year-fixed mortgage rate currently sits at 6.09%.
Another reason the share of buyers paying in cash has declined: It’s the strongest buyer’s market in recent history. Sellers outnumber buyers by a record 47%, giving the buyers who are in the market negotiating power. Buyers aren’t facing much competition, which means they don’t 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.
While most buyers today don’t need to pay in cash to win a home, paying in cash can still help buyers get better deal terms. Sellers in some areas—especially Texas and Florida—are 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.
“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.”
Share of Buyers Using FHA Loans Falls to Four-Year Low
Roughly 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.
FHA loans are insured by the U.S. government and meant for low-to-moderate-income borrowers. They’re popular with first-time homebuyers because they have lower financial requirements than conventional loans; typically, they require a 3.5% down payment.
“A lot of homebuyers—especially FHA buyers—are getting cold feet when they see the actual monthly payment and the amount of money they need to bring to the table at closing,” said John Tomlinson, a Redfin Premier real estate agent in Fort Lauderdale, FL. “They may only have a 3.5% down payment, but with prepaid taxes and mortgage insurance, closing costs can be $20,000–$30,000. Rising HOA fees are adding insult to injury.”
One 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—the population that typically uses FHA loans—have been priced out of the housing market. That may explain why we’re seeing a rising share of buyers using conventional loans.
Over 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.
It'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.
VA loans, 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.
Metro-Level Highlights
The data below represents December 2025 and covers 38 of the most populous U.S. metros.
All-cash purchases
All-cash purchases were most prevalent in West Palm Beach, FL, where 47.2% of buyers paid in cash. Next came Jacksonville, FL (39.3%) and Miami (39.3%).
They were least prevalent in Seattle (17.3%), Oakland, CA (18.5%) and Sacramento, CA (19.6%).
The share of buyers paying in cash increased most in Providence, RI, Atlanta and Denver.
The share of buyers paying in cash decreased most in Milwaukee, Phoenix and Cleveland.
FHA loans
FHA loans were most prevalent in Riverside, CA, where 25.6% of mortgaged homebuyers used one. Next came Las Vegas (24%) and Atlanta (21%).
They were least prevalent in San Francisco (1.1%), San Jose (4.3%) and Anaheim (5.8%).
The share of buyers using FHA loans increased most in San Jose, Atlanta and Cincinnati.
The share of buyers using FHA loans decreased most in Providence, Cleveland and Jacksonville.
VA loans
VA loans were most prevalent in Virginia Beach, VA, where 36.8% of mortgaged homebuyers used one. Next came Jacksonville (19.6%) and San Diego (16.8%).
They were least prevalent in San Francisco (0.7%), San Jose (1.8%) and New York (1.9%).
The share of buyers using VA loans increased most in Jacksonville, San Diego and Orlando, FL.
The share of buyers using VA loans decreased most in Virginia Beach, Milwaukee and Sacramento.
Conventional loans
Conventional loans were most prevalent in San Francisco, where 98.1% of mortgaged homebuyers used one. Next came San Jose (93.9%) and Anaheim (90.6%).
They were least prevalent in Virginia Beach (47%), Jacksonville (65%) and Las Vegas (65.1%).
The share of buyers using conventional loans increased most in Cleveland, Providence and Tampa, FL.
The share of buyers using conventional loans decreased most in Atlanta, San Jose and Anaheim.
Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.
