Almost one-third of home sales nationwide were all-cash transactions in July, nearing an eight-year high, according to Redfin.
Some 31.4% of home purchase deals were paid for entirely in cash during the month, up from 27.5% in July 2021. All-cash purchases gained steam in early 2021 during the height of the pandemic-era homebuying boom and levels of all-cash deals have stayed high ever since.
All-cash purchases saw their popularity rise last year as way to get a leg up on homebuying competition, with the vast majority of homes for sale receiving multiple competitive offers. But lately, with mortgage rates twice what they were last year, all-cash purchases have picked up for a different reason: affluent buyers are wielding cash as a means to avoid the high-interest payments that have amplified home prices.
Consequently, the areas where all-cash transactions are most common are often areas where wealthy buyers are in abundance. The highest share of cash buyers in July (66.5% of home purchases) was found in Long Island, New York, home of the Hamptons. In addition, three of the five metro areas with the largest shares of all-cash purchases — West Palm Beach (56.4%), Jacksonville (45.5%) and Fort Lauderdale (43.3%) — are in Florida, in part because the Sunshine State boasts a large number of well-to-do homebuyers. Milwaukee (45.3%) was in fourth place, nestled among the Florida cities.
Interestingly, a trio of West Coast cities, while having a large number of affluent residents in the area, have their shares of all-cash purchases held down by high home prices that make it tough to pay without mortgage financing. These cities include Oakland (15.1%), San Jose (16%) and Seattle (16.7%). Each of these metros are among the bottom five metros for all-cash purchase shares. They are joined by Washington, D.C. (17.5%) and Pittsburgh (17.8%).