All-cash home sales hold strong as high mortgage rates persist

"Cash offers surged during the height of the COVID-19 housing frenzy, when buyers competed fiercely for limited inventory. Those offers remain appealing because they close faster and avoid the risk of financing or appraisal complications key advantages for sellers seeking certainty. As borrowing costs rose beginning in mid-2022, wealthier buyers increasingly used cash to sidestep expensive loans, the report said."

"Although cash deals have dipped slightly from their postGreatRecession peak, sellers still tend to favor them over financed offers. Harrison Stevens, vice president of marketing at TurboTenant, recalled losing out to a cash buyer. I had found a property I really liked and had formed a good relationship with the seller, he said. At the last second, they reached out and told me they ended up going with a cash buyer instead, which was a shock."

"Realtor.com data show four main types of cash buyers; investors, second-home shoppers, high-net-worth individuals and older homeowners leveraging equity. Investors especially large institutional players account for a significant portion of cash deals. Deed data indicates that limited liability companies and corporations represent a disproportionate share of all-cash transactions. In 2024, the share of investors buying with cash was nearly twice the overall cash-sales rate, the report added."

Cash offers surged during the COVID-19 housing frenzy and continue to appeal because they close faster and avoid financing or appraisal risks, offering sellers greater certainty. Rising borrowing costs since mid-2022 led wealthier buyers to use cash to avoid expensive loans, reflecting concentrated wealth and creating difficulties for mortgage-dependent buyers. Cash deals have dipped slightly from their post-Great Recession peak, yet sellers still tend to favor cash offers. Four main cash-buyer types appear: investors (including institutional buyers and LLCs/corporations), second-home shoppers, high-net-worth individuals, and older homeowners leveraging equity.

Read at www.housingwire.com