A report from the National Association of Realtors reveals that first-time homebuyers represent just 22% of the market, continuing a trend of historically low participation driven by housing shortages and elevated prices. However, among those managing to enter the market, a notable shift has emerged in how purchases are financed.
For the first time since data collection began in 2003, 1 in 10 first-time buyers purchased their homes entirely with cash. Those paying all cash tend to be significantly older and wealthier than financed buyers. The median age for cash-paying first-time buyers reached 54, compared to 38 for those obtaining mortgages and 40 for all first-time buyers overall. Inheritance and proceeds from inherited property sales proved instrumental for cash purchases, with 28% citing inheritances and 21% using inherited property sale proceeds as funding sources.
The shift reflects broader changes in wealth dynamics and purchasing power. While personal savings remains the primary down payment source for first-time buyers overall, a growing number rely on liquidated assets such as retirement accounts, stocks, or cryptocurrency rather than family loans or gifts. Economists attribute this partly to the increased comfort of older buyers in deploying their own resources rather than requesting family assistance at more advanced ages. Elevated mortgage rates have further incentivized all-cash offers, as 30-year financing has become substantially more expensive.
Real estate professionals across the country observe intensifying competition centered around cash offers. In competitive markets, all-cash bids have become nearly standard among serious offers, with some younger buyers even obtaining temporary loans from family members to strengthen their proposals before refinancing into mortgages post-closing. Experts anticipate the share of inheritance-funded purchases will expand as baby boomers advance into their 80s and beyond.
Meanwhile, prospective buyers without access to inherited wealth face diminishing prospects. Those carrying debt from student loans, auto payments, and other obligations alongside minimal savings encounter steep barriers to homeownership at current price levels, with some choosing to remain renters rather than overextend financially. This dynamic underscores a widening divide between those receiving generational wealth transfers and those relying solely on earned income.
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