New data released by real estate brokerage Redfin shows that roughly one-third of home purchases in the U.S. were bought with cash in July. That’s up from 27.5% the year before and higher than nearly any point since early 2014. (The one exception was a slightly higher peak for cash buyers this past February.)
All-cash offers surged in popularity during the early days of the pandemic, when a crush of demand and a shortage of inventory forced potential buyers into fierce competition. It was common for homes to sell well above their asking prices, too.
While house prices aren’t growing nearly as fast now, homebuyers in many cities are still sticking with cash. Redfin attributes the staying power of the all-cash offer to the rapid spike in mortgage rates from around 3% at the beginning of the year ago to more than 6% this week — their highest level since the financial crisis.
“Many first-time homebuyers are finding the door to homeownership is closed for this season” largely due to higher mortgage rates, Realtor.com Senior Economist George Ratiu wrote in a recent blog post. Ratiu pointed to data showing that the buyer of a median-priced home today’s rates can expect a monthly payment of $2,100 — 66% higher than this time last year.
Cash buyers don’t have to worry about the rising borrowing costs that have pushed other potential buyers out of the market. Redfin also notes that the majority of purchases by housing investors are made with cash.
10 places with the highest rate of cash home sales
Here are the top 10 places where cash-purchases are most common, along with the portion of home sales that cash purchases comprise, according to Redfin’s analysis of data from July:
- Nassau County, New York: 66.5%
- West Palm Beach, Florida: 56.4%
- Jacksonville, Florida: 45.5%
- Milwaukee, Wisconsin: 45.3%
- Fort Lauderdale, Florida: 43.3%
- Orlando, Florida: 42.5%
- Atlanta, Georgia: 42.4%
- Cleveland, Ohio: 42.1%
- Charlotte, North Carolina: 41.8%
- Tampa, Florida: 41.3%