Core Insights - The share of all-cash home purchases in the U.S. fell to 29% in December 2025, the lowest for that month since 2020, down from 30.3% a year earlier [1] - The decline in cash purchases is attributed to lower mortgage rates and a strong buyer's market, where sellers outnumber buyers by a record 47% [1] - The use of FHA loans decreased to 14.4%, the lowest December share since 2021, as many low-to-moderate-income Americans have been priced out of the housing market [1] All-Cash Home Purchases - All-cash purchases peaked at nearly 35% in late 2023 due to high mortgage rates, but have since declined as rates fell to an average of 6.09% [1] - Cash deals are still attractive in certain markets, particularly in Texas and Florida, where homes are sitting on the market longer [1] - Buyers paying in cash can negotiate better terms, often securing homes for 10-20% below appraised value [1] FHA Loans - The share of buyers using FHA loans decreased most in Providence, Cleveland, and Jacksonville [1] - FHA loans were most prevalent in Riverside, CA, where 25.6% of mortgaged homebuyers used one [1] - The decline in FHA loans is linked to rising housing costs, which have made it difficult for typical FHA borrowers to enter the market [1] VA Loans - The share of buyers using VA loans increased slightly to 7% in December, with the highest prevalence in Virginia Beach at 36.8% [1] - VA loans were least prevalent in San Francisco (0.7%) and San Jose (1.8%) [1] - The increase in VA loans indicates a stable demand among veterans and service members despite overall market trends [1] Conventional Loans - Over 78.6% of mortgaged homebuyers used conventional loans in December, the highest December share since 2021 [1] - The share of buyers using conventional loans increased most in Cleveland, Providence, and Tampa [1] - Conventional loans were most prevalent in San Francisco, where 98.1% of mortgaged homebuyers opted for this type [1]