All-cash sales hits lowest level since 2020

Managing expectations

Markets shift. Rates move. Prices get reduced. Deals fall out of escrow.

None of those events is inherently good or bad. What determines whether your clients panic or stay steady is their interpretation of them. Stress doesn’t come from the events themselves — it comes from the expectations attached to them.

The agents who keep their clients calm aren't lucky. They know how to prepare their clients, how to manage their expectations. 

It’s one of the most important skills any agent can have. In today’s Blueprint, we show you how to hone it.

Let’s dig in!

- David

All-cash purchases ended 2025 at a five-year low

29% of homebuyers paid in cash in December. According to Redfin, that’s down from 30.3% a year earlier and the lowest December share since 2020. Cash purchases peaked near 35% in late 2023, when mortgage rates were in the high-7% range. 

Here are the other key takeaways from Redfin’s latest update:

• The average 30-year rate is now 6.09%, reducing the incentive to avoid financing.

• This is the strongest buyer’s market in recent history: sellers outnumber buyers by 47%.

• Less competition means buyers don’t need to use aggressive tactics (cash, waived contingencies) to win.

• Florida metros dominate cash purchases (West Palm Beach at 47%).

• West Coast metros show the lowest cash shares (Seattle, Oakland, Sacramento).

• FHA usage fell to 14.4% of mortgaged purchases — the lowest December share in four years.

• Conventional loans rose to 78.6%, the highest December share since 2021.

My take

Cash is still powerful — it’s just no longer necessary in the broader market. When rates were in the high-7% range, paying cash was both a competitive advantage and a hedge against expensive financing. With mortgage rates near 6% and sellers outnumbering buyers by 47%, that urgency has faded. But FHA usage hitting a four-year low reveals what entry-level buyers are up against. While buyers in general may have more negotiating leverage today, many lower-income households still can’t clear the income, monthly payment, or cash-to-close hurdles required to purchase. Meanwhile, at the very top of the market, the opposite dynamic is playing out: all-cash offers from ultra-wealthy buyers, who remain largely insulated from financing constraints, are on the rise.

Housing demand is stabilizing

Weekly pending sales are finding their footing. Last week, they came in at 59,469 (2026) vs. 60,316 (2025). That’s according to Housingwire’s latest update. Here are the key data points they report:

• Purchase applications are stabilizing: No negative YoY readings in 2026 so far, though week-to-week has been choppy (2 positive, 2 negative, 1 flat). Three weeks posted double-digit YoY growth.

• Mortgage rates are near the bottom of the forecast range:

  • 30-year mortgage rate: 6.04%–6.07%

  • 10-year Treasury yield: ~4.05% (after swinging between 4.25% and the low 4s)

  • 2026 forecast: 5.75%–6.75% (mortgage rates) and 3.80%–4.60% (10-year) 

• Mortgage spreads are improving: Spreads at 1.91%, close to historical norms (1.60%–1.80%). If spreads were at 2023 peaks, rates would be roughly 7.24%, so normalization is keeping borrowing costs contained.

• Inventory is rising, but slowly

  • Total inventory: 690,547

  • YoY growth cooled from 33% to 8.24%.

• Price cuts easing: 32.13% vs. 33% last year (nearly 1% lower YoY)

My take

It’s too soon to draw firm conclusions, but here’s what we’re seeing so far: strip out the distortion caused by the snowstorm, and you’re looking at a market that can function at roughly 6% mortgage rates — just not accelerate. Inventory is still rising, but slowly. Price cuts are easing. Demand hasn’t cracked, but it hasn’t broken out either. The real story remains rates and spreads. As long as the 10-year stays near the low end of its range and spreads remain contained, housing can grind forward. If yields jump, activity cools quickly. This spring will show whether we’re building momentum or simply stabilizing in a narrow band.

Markets where buyers are backing out of deals the most

In December 2025, 7.1% of home sales fell out of contract — unchanged from a year earlier, according to Realtor.com. At the same time, existing-home sales dropped 8.4% in January, marking the slowest pace in more than two years. 

Here are the top 5 metros with the highest cancellation rates:

1. Atlanta, GA: 10.3%

2. Las Vegas, NV: 10.1%

3. San Antonio, TX: 9.6%

4. Riverside, CA: 9.3%

5. Phoenix, AZ: 9.2%

My take

When contract cancellations spike, it’s usually because something shocks the system — think March 2020 when the pandemic hit, or periods like 2018, 2022, and 2023 when mortgage rates were rising quickly, and buyers had to recalibrate. That’s not what we’re seeing today. Rates recently touched a three-year low of 6.09% and have been relatively steady. What’s happening now looks more like a shift in leverage. Inventory is building in certain metros, competition is easing, and buyers simply have more choices. So during the due diligence window, some are backing out for a better deal, better terms, or a home that fits them better. Buyers aren’t being forced out — they’re taking advantage of the options they have.

Schematics

The news that just missed the cut

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• The community hidden from Google Maps: How the wealthy stayed secret for decades 

• This Lake Tahoe enclave has some of the country’s priciest waterfront homes

Foundation Plans

Advice from David to win the day

Managing expectations is one of the most important skills in this business. The good news is, like any skill, it’s something you can get better at with practice. So today, I want to share a few practical ways to do it well:

1. Listen to Your Clients –  You’ll be surprised by how often agents forget this step. You can’t manage your client’s expectations unless you have a clear understanding of what they are. Actively listen. Some clients aren’t clear in their own minds. Help them by asking the right questions and giving them a comfortable space to express their needs.

2. Educate Your Clients –  You need to provide market context to your clients. They are consuming headlines, social media takes, and national narratives that often don’t reflect what’s happening locally. Your role is to anchor them in reality. Bring data. Bring comparables. Bring perspective.

For example, on the listing side, homes are staying on the market longer. That doesn’t mean something’s wrong with the house. It just reflects the shift in leverage happening now. Use actual data to reframe that shift and reset your client’s expectations early. Show them how to price realistically, leave room for concessions, and explain why a price adjustment can be a smart move, not a panic move. 

The agents who stand out right now are the ones who help clients understand what’s changed and how to navigate it calmly.

3. Communicate Proactively and Consistently – Silence creates anxiety. When buyers or sellers don’t hear from you, they often assume something is wrong — or worse, that they’re not a priority. Don’t leave room for that narrative to form. Set clear expectations at the outset about how and when you communicate. Let them know your typical response times for calls, texts, and emails. If you’re going to be unavailable, tell them in advance. Most importantly, build a rhythm of regular check-ins, even when there’s no major update. A quick touchpoint reassures clients that you’re engaged, attentive, and actively managing their transaction. Consistency builds trust — and trust stabilizes expectations.

4. Be Open and Honest from the Start –  Talk through the pros and cons upfront. Don’t overpromise on things you can’t control. When you’re transparent about risks, timelines, and potential obstacles, clients feel prepared rather than surprised. Honesty builds credibility. And credibility sustains long-term relationships..

These are just a few pointers. To learn more, read this article.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“The only person you are destined to become is the person you decide to be.” – Ralph Waldo Emerson

Take ownership of your life, friends. What you’re not changing, you’re choosing. Whatever your goal, the path is the same: make the move. Decide to become the person you want to be, and then act. Don’t just think about it

- David