Nearly one in three homes sold in the first half of this year were purchased in all-cash transactions, according to a new data report from Realtor.com.
Nationwide, 32.8% of home sales in the first year’s first six months were all-cash transactions, down slightly from last year but above the pre-pandemic norms when cash averaged just 28.6% of sales.
During the year’s first half, two-thirds of homes under $100,000 and more than 40% of homes over $1 million were bought with cash, with the share topping 50% for homes above $2 million. Older households and buyers with significant equity were more likely to purchase without a mortgage, often using proceeds from a prior home sale, while high-wealth buyers were less influenced by borrowing costs and more likely to decide between cash and financing based on broader financial considerations.
The top five states for all-cash sales were Mississippi (49.6%), Montana (46.0%), Idaho (45.0%), Hawaii (44.9%), and Maine (44.4%). Hawaii and Maine attract affluent second-home cash buyers, many of them older and equity-rich, while Montana and Idaho recorded elevated shares as out-of-state cash buyers.
Among metros, Miami (43.0%), San Antonio (39.6%), Kansas City, Kan. (39.2%), Birmingham, Alabama (38.8%), Houston (38.8%), and St. Louis (38.1%) led the nation in cash share for the first half of the year while younger, high-cost, job-centered markets such as Seattle (17.9%), San Jose (20.6%), Denver (20.7%), and Washington, DC (21.5%) saw the lowest cash shares.
“Cash buyers have long been a fixture in the market, but their influence is more pronounced today than in pre-pandemic years,” said Danielle Hale, chief economist at Realtor.com. “High-wealth buyers, investors, and those with significant equity can move quickly and often win out in competitive situations. For traditional, mortgage-reliant buyers, this can add another hurdle in an already challenging affordability environment.”
There are few owner-occupant buyers of homes in the expanded Indianapolis marketplace that purchase properties under $125k. That’s because those potential customers have serious credit and/or employment issues, a lack of cash for renovations and many of these priced homes usually do not meet FHA/VA habitability standards and thus financing requirements. They are also competing with investors for buy & flips or investment properties therefore the cash buyers dominate. There is also a longer trend of fewer owner-occupied buyers wanting “fixer uppers” much anymore in this price range. Much of the lower class and working class are becoming more rental dependent than ever before. While there are economic reasons there are also social reasons for these ownership or rental trends. The days of the “move up” buyer still exists but it has switched to higher priced properties in the marketplace.