You May Have Enough Equity to Downsize and Buy Your Next Home in Cash
If you’ve been considering a move but are unsure how to make it happen financially, you may be in a better position than you think. Thanks to rising home values over the past few years, many homeowners now have a significant amount of equity, enough to downsize and purchase their next home outright, without taking on a new mortgage.
In fact, a record number of homeowners are doing just that. According to the National Association of Realtors, the number of all-cash buyers has climbed steadily since 2020, reaching 26% of all home purchases in 2024. This is the highest percentage in over two decades.
Why Are More Buyers Using Cash?
For many homeowners, particularly baby boomers, equity has become a powerful tool. Freddie Mac reports that since the pandemic, boomer household wealth has increased by $486,000 on average, and half of that is directly tied to home price appreciation. With many in this generation looking to simplify, reduce expenses, or relocate closer to family or amenities, downsizing has become an attractive option.
As The Mortgage Reports puts it, “Downsizing promises a better way of life with no mortgage or rent, lower homeownership costs, and often a cash surplus after closing.” This extra financial cushion can be used for travel, retirement, family support, or simply peace of mind.
The Key Benefits of Buying with Cash
There are several reasons why cash buyers have a strong advantage in today’s market:
- Your offer is more appealing to sellers: Without a financing contingency, cash offers often rise to the top in competitive situations.
- You may be able to close faster: No lender delays mean the deal can wrap up more quickly.
- You can avoid rising mortgage rates: Locking in cash means sidestepping concerns about rate fluctuations.
- You eliminate a monthly mortgage payment: This is one of the biggest lifestyle and budget benefits for downsizers and retirees.
Home Equity Is at Record Levels
As of spring 2025, homeowners in the U.S. hold a collective $17.6 trillion in equity, with over $11.5 trillion classified as tappable. That’s the highest ever recorded. Even if you’re not planning to use a HELOC or loan against your home, that equity could be the key to purchasing your next property in cash.
According to data from Rocket Mortgage, most all-cash buyers are leveraging the equity they built over the last decade, especially those who bought before or during the early days of the pandemic housing boom.
What This Could Mean for You
If you’re thinking about moving but hesitant about rising costs or taking on a new loan, this may be your moment. Selling your current home and using the equity to purchase something smaller or more manageable could allow you to:
- Reduce your monthly expenses
- Eliminate the need for financing
- Strengthen your position as a buyer
- Enjoy greater flexibility in retirement or semi-retirement
Final Thoughts
Homeownership has long been a reliable path to building wealth. Now, many homeowners are using that built-up equity to create financial freedom by downsizing and buying their next home in all cash.
If you’re unsure how much equity you have or whether it could be enough to make a move without a mortgage, now is the time to find out. Let’s connect and review your options. You may be closer to your next chapter than you think, and it might just come without a monthly payment.
Reach out to the Denise Ramey Team, Charlottesville’s #1 Team by volume, # 5 in the State of Virginia in Transactions, #6 in Volume and in the Top 1% of agents Nationwide! Who you work with matters!
