Roughly three in 10 homebuyers (28.8%) in March eschewed mortgage financing to pay for residential properties with all-cash transactions. According to a data report from Redfin, that share was down from 29.8% one year before and tied with 2021 for the lowest March share since 2020.
All-cash purchases were most prevalent in Cleveland and West Palm Beach, Florida, where more than half (51.1% each) of all March home purchases were made in cash. Next came Detroit, where 45.8% of purchases were made in cash, Riverside, California (38.1%) and Fort Lauderdale (38%).
Redfin observed that all-cash purchases are common in places like West Palm Beach and Fort Lauderdale because they attract a lot of affluent retirees and second-home buyers, while Cleveland and Detroit have a large number of relatively lower-priced homes for sale.
All-cash purchasing was less prevalent in the pricey West Coast markets. In Seattle, 17.6% of home purchases were made in cash in March, the smallest share of the metros Redfin analyzed. Next come four California metros: Oakland (18.4%), Sacramento (19.9%), Los Angeles (20.5%) and San Diego (20.7%).
All-cash home purchases peaked at nearly 35% in 2023 when mortgage rates hit a two-decade high of almost 8%. While mortgage rates are still elevated compared to the pre- and mid-pandemic levels, many buyers are now viewing the rates as manageable while wider economic developments further influence their financing decisions.
“Cash buyers have retreated,” said Beth Behling, a Redfin Premier agent in Chicago. “Buyers are feeling jittery about the economy, and it’s not financially comfortable to drop a huge chunk of money into a home; they may prefer to have more cash on hand.”
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