In September, just over one-third (34.1%) of United States home sales were made in all cash. This is up from 29.5% a year prior and the highest share in nearly a decade, according to a new report from Redfin.
According to Redfin, all-cash purchases are making up a bigger piece of the homebuying pie for two major reasons. Affluent Americans who can afford to pay cash are more apt to buy homes in such an expensive housing market, when the income necessary to buy a home is higher than ever before, and elevated mortgage rates make buying a home in cash and avoiding interest altogether more attractive.
The weekly average 30-year fixed mortgage rate hit 7.2% in September, its highest level in two decades. They moved even higher in October, nearing 8% and pushing monthly mortgage payments up about 20% from a year ago to record highs. Rates have since come down a bit from their October highs, but they’re still more than double early-pandemic levels.