All-Cash Purchases Made Up One-Third of Home Sales in July

Around one-third of all U.S. home purchases were paid for with all cash in July, down slightly from the eight-year high reached in February, but still a historically high year-over-year gain of 27.5%, according to Redfin. All-cash purchases surged in popularity during the mid-pandemic homebuying boom as affluent buyers sought out ways to avoid high interest payments and to stand out among a competitive buyer pool.

As a result, the metro areas with the highest share of all-cash purchases are also home to some of the most affluent buyers in the country. Three of the five metro areas with the most all-cash home purchases were located in Florida, and Hampton buyers also made Long Island a hotspot for cash purchases in July.

All-cash purchases jumped in popularity last year because they allowed buyers to stand out among fierce competition: Bidding-war rates reached record highs in early 2021 due to sub-3% mortgage rates and remote work driving homebuyer demand. Remote work has also given more Americans the option to use all cash, as it allowed a record share of homebuyers to relocate, often from expensive to affordable parts of the country. U.S. home values have skyrocketed since the start of the pandemic, which means Americans who sell a home in a pricey place like San Francisco may use equity to pay cash in a more affordable area like Las Vegas.

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