It takes more money than ever to buy a home in America right now. And nearly a third of home buyers navigating the high mortgage rates, rising home prices and low inventory are somehow buying their homes entirely in cash.

The share of home buyers paying all cash reached 33 percent through August this year, according to data from Redfin — one of the highest rates since the years following the Great Recession.

“The demographics of buyers doing this is incredibly broad,” said Compass Realtor Megan Dwyer in Florida’s Southeast coast. “Young families, retirees, local moves, multistate moves.”

See where all-cash buyers snagged homes in your neighborhood this year.

 

Many of the all-cash buyers are selling previously owned homes to fund their moves. But the rise of cash buys is making it even harder for first-time home buyers. Between July 2023 and June 2024, the share of first-time home buyers in the market was only 24 percent — a historic low.

“If it’s a multiple offer situation, it’s likely going to be hard to beat an all-cash offer,” said Jessica Lautz, deputy chief economist for the National Association of Realtors. Cash offers often move quicker and are seen as less risky for the sellers.

And the struggle to break into the housing market may not ease anytime soon — property experts surveyed by Reuters expect affordability to get worse for first-time buyers over the next year.

As cash purchases have become more common, the median age of home buyers has been ticking up and now stands at 56 years old, according to NAR’s data from July 2023 to this June. Even for first-time buyers, the median age has risen to 38 compared to 35 last year.

In Florida’s Southeast coast, Dwyer said she’s noticed an uptick in cash transactions in the last year — primarily people making contingent offers dependent on the sale of their previous home.

Parts of Florida have consistently seen the highest shares of all-cash buyers in recent years. Its metro areas hold four of the top five spots in the nation. Denny Grimes, a Realtor with Keller Williams in Naples, Florida, where 60 percent of homes purchased in the metro area this year were cash buys, said he sees a lot of people shopping for second homes or retirement homes.

But it’s not all people searching for homes in the sun. There has also been an influx of all-cash investors in the Midwest, with its relatively cheaper prices, said Jeffrey McManamon, a Realtor in Northeast Ohio.

Near Cleveland, first-time home buyer Taylor DiDonato estimates she and her husband put in offers on seven or eight houses before their bid was finally accepted. They lost out to cash offers and to buyers offering $10,000 or more over listing prices.

“It came to the point where we were looking for backup options, but rent had gotten so high,” she said. They finally snapped up a house from sellers who had already bought a new place.

DiDonato’s struggle is a common theme in the Midwest. In Cleveland’s metro area, the share of all-cash buyers hit 40 percent this year. McManamon said he’s had so many calls from potential investors that he can’t take them all.

The Federal Reserve cut interest rates this year after inflation eased and the job market fell into better balance. But the mortgage market has yet to feel major relief. Even if the Fed continues to dial back interest rates, some economists say cash offers are here to stay because cash is a way to win in a competitive market.

Cash also offers a psychological benefit, said Redfin chief economist Daryl Fairweather: “People like to pay off their homes or own them in cash.”

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Stephanie has worked with clients in all price ranges and has successfully executed many complex transactions.