A record number of first-time home buyers now pay in cash. Here's where they get the money.

By Aarthi Swaminathan

The median age of a first-time home buyer is 40, according to the National Association of Realtors.

Record-high home prices haven't stopped buyers, particularly first-timers, from offering cash for houses.

In Short Hills, N.J., an affluent suburb of New York City where many homes sell for more than their asking price, real-estate agent Chrissy Schwartz's buyer clients have been getting creative with their all-cash offers.

In addition to going over the asking price, some offer to pay the seller's agent's commission, as well as to cover the so-called mansion tax, which sellers in New Jersey pay on homes with a purchase price of over $1 million.

Going above and beyond with their cash offers is worth it for these buyers, as it gives them an edge in the area's still-hot housing market, Schwartz told MarketWatch. An all-cash offer amounts to magic words for sellers, who get access to cash without any holdups, such as having to wait for underwriting to approve the buyer's mortgage application.

"Buyers are getting savvier," Schwartz said, and they know what type of offers can motivate a seller.

All-cash buyers are, paradoxically, becoming more common in a housing market that's been struggling with affordability. At a time when fewer people are buying homes because of record-high home prices and elevated mortgage rates, a record 10% of first-time buyers offered all cash for homes between July 2025 and June 2026.

That was the highest share since the National Association of Realtors began tracking the statistic in 2003, the trade group said in its annual Profile of Home Buyers and Sellers.

First-time buyers accounted for about 22% of all buyers and were much older than in the past, with a median age of 40, NAR said.

The median age among the first-time buyers who offered all cash for homes was even higher, at 54, NAR said, while the median age of buyers who took on a mortgage to pay for a house was 38.

The record share of first-time buyers forking out all cash for homes signals that "avoiding higher mortgage interest rates may be the deciding factor to make an all-cash purchase, if they have the financial wherewithal to do so," Jessica Lautz, deputy chief economist at the NAR, told MarketWatch.

About 28% of first-time buyers who paid all cash for their home tapped into an inheritance, NAR said in its report. That was the second-largest source of funds, while the biggest source of funds for all-cash purchases came from buyers' own savings, with 42% of first-timers using that money to buy a house.

More first-time buyers than ever tapping into an inheritance to pay for a home "illustrates the difficulty entering the housing market on personal savings," Lautz said.

"The trend also highlights the generational transfer of wealth that is starting to occur among the silent generation and baby boomers into the pockets of the next generation," she added.

What's inside the all-cash offers

In New Jersey, Schwartz said buyers sometimes make deals that look like all-cash offers by waiving the mortgage contingency. The buyer essentially agrees to complete the purchase even if they can't get a mortgage. It's a risky move because buyers cannot back out of the contract, meaning they could lose the deposit or earnest money they put toward the purchase.

Some buyers who have deep pockets will waive the mortgage contingency and present an all-cash offer using money in their bank account or in a trust. The transaction gets classified as an all-cash deal. But the buyer can then apply for a conventional mortgage on the property after closing, a move called delayed financing.

An all-cash offer can also include more than simply paying a seller for the home. Buyers in competitive markets may also offer to pay transaction costs to make their offer even more attractive. Buyers will sometimes pay the seller's closing costs, title fees, their real-estate agent's commission and other costs, such as the mansion tax in New Jersey or transfer taxes in Georgia.

In Maryland, real-estate agent Ricky Cantore is seeing more buyers offer cash using money from their parents. Some of his clients' parents provide an intrafamily loan, for instance, where instead of a mortgage, the buyer uses family money to finance the purchase. They then repay that loan, which is outlined in a formal agreement.

Cantore said that such arrangements allow the buyer to present a cash offer but ultimately pay for the house with a loan they can repay at an interest rate that's sometimes substantially lower than the prevailing mortgage rate, which is now over 7%.

Cantore, who helps buyers and sellers in the Baltimore and Washington, D.C., area, said the housing market in his region is still competitive, so sellers prioritize all-cash offers.

"A lot of people have to be here for jobs, but things have gotten unaffordable," he told MarketWatch. As a result, older, wealthier parents are pitching in. About half of his buyers had their parents involved, Cantore added.

These are home buyers who have done "everything right," he said. "They graduated from a four-year college, or they even have a master's degree. They save money, they're working full time at what appears on paper to be an impressive job. And they have a combined household income of $300,000 or $400,000 a year."

But with seven-figure price tags for homes in certain areas in his market, he added: "That's still not really enough."

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-Aarthi Swaminathan

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