One-Third of Homebuyers Are Paying in Cash

Buyers using cash to purchase a home reached 33.4% in April, the highest percentage in nearly a decade.

According to Redfin, this is up from 30.7% from April 2022 and remained stable throughout the first quarter of 2023.

With all-cash purchases making up such a large percentage of home sales, down payments have also seen a decrease. In April, the average down payment was $52,500, an 18% drop year over year.  The median down payment represented 13.1% of the home’s final cost, a decrease of 3.4% from April 2022. Homes receiving multiple offers also fell; around 46% of homes had more than one offer, down 13% year over year.

The percentage of homebuyers using FHA loans increased, representing 16.4% of homes with a mortgage purchased in April, the largest percentage in more than three years. It’s an increase of 6% year over year, the biggest yearly gain yet. Around 7% of homes with a mortgage used a VA loan, up from 5.9% year over year.

In Pennsylvania, Pittsburgh had one of the lowest down payment and down payment percentage in the country. The median down payment was $15,000 in April, representing a 5% percentage. The percentage of homes purchased there with all-cash was 34.3%, the percentage of mortgaged homes using a FHA loan was 4.7% and the percentage of mortgaged homes using a VA loan was 4.7%.

In Philadelphia, nearly 41% of homes bought in April were all-cash purchases, while 19.3% of mortgaged homes used a FHA loan and 2.5% used a VA loan. In Philly, the median down payment was $22,250, representing 8.3% of the total home cost. This is a decrease of 23.3% year over year.