Cash continues to be king, at least when it comes to landing real estate in this market.
According to Redfin, all-cash purchases hit their highest level since 2014 in October. Roughly one-third—31.9 percent—of U.S. home purchases were paid for with all cash last month. That’s up from 29.9 percent a year earlier.
“Today’s affluent homebuyers are motivated to pay in cash because the surge in mortgage rates makes them want to avoid loans–and the high monthly interest payments that come with them–altogether. Mortgage rates have declined in recent weeks but are still hovering above 6 percent,” said Redfin Economics Research Lead Chen Zhao. “During the pandemic housing boom, buyers were incentivized to pay in cash because of low rates, which drove up competition and made all-cash offers an effective bargaining chip for those who could afford them.”
The share of home purchases using all cash shot up in the beginning of 2021 after reaching a record low of 20.1 percent in April 2020.