All-cash sales of existing homes comprised a quarter of transactions in April as competition in the housing market continued, according to the latest REALTORS® Confidence Index Survey. This marks an increase from 15% of similar sales a year ago and 20% in 2019, the survey shows.
Despite low mortgage rates, more buyers are bringing cash to make their offers stand out in a bidding war.
The share of cash buyers among primary residence buyers also has climbed. In April 2018 and April 2019, only about 12% of primary residence buyers made an all-cash purchase. That share has since increased to 15% as of April of this year, the survey finds.
The share of all-cash sales among vacation homes also is increasing, jumping to 61% in April compared to 50% over recent years, the survey shows.
On the other hand, Gay Cororaton, research economist for the National Association of REALTORS®, says at the association’s Economists’ Outlook blog that there hasn’t been a noticeable shift in the share of all-cash sales among buyers who are purchasing a property to rent it out. “With low mortgage rates, home buyers who intend to rent out the property are taking advantage of low mortgage rates to finance the acquisition of the property,” she says. “However, they could be putting down higher down payments of over 20%.”
Overall, the metro areas seeing some of the highest increases in cash sales in January and February this year compared to a year earlier (pre-pandemic), according to realtor.com® research, are:
- Reno, Nev.: 51% (share of cash sales in January and February), up 29% from a year earlier
- Racine, Wis.: 40%, up 18% from a year ago
- Greenville, S.C.: 38%, up from 14%
- El Paso, Texas: 15%, up from 13%