Skip to main content

Redfin: All-Cash Home Sales At Highest Level Since 2014

Dec 21, 2022
Redfin All Cash Homes October 2022
Staff Writer

Roughly one-third of U.S. home purchases were made with all cash in October.

KEY TAKEAWAYS
  • Redfin’s report found that FHA loans improved, with nearly one in seven mortgaged home sales using an FHA loan.
  • All-cash purchases were most common in Florida in October.

Nearly one-third (31.9%) of U.S. home purchases were paid for with all cash in October, according to a new report from Redfin. That’s up from 29.9% a year earlier and the highest share since 2014.

The share of home purchases using all cash shot up at the beginning of 2021 after reaching a record low of 20.1% in April 2020. But Redfin noted that the factors encouraging buyers to pay in cash are different in the current slow housing market than they were during the pandemic homebuying frenzy.

“Today’s affluent homebuyers are motivated to pay in cash because the surge in mortgage rates makes them want to avoid loans — and the high monthly interest payments that come with them — altogether. Mortgage rates have declined in recent weeks, but are still hovering above 6%,” said Redfin Economics Research Lead Chen Zhao. “During the pandemic housing boom, buyers were incentivized to pay in cash because of low rates, which drove up competition and made all-cash offers an effective bargaining chip for those who could afford them.”

All-cash home purchases increased in 29 of the 39 metros in Redfin’s analysis from October 2021 to October 2022. They increased most in Riverside, Calif., where they rose to 38% of all home sales from 19.2%. That was followed by Cleveland at 47%, up from 32%.

All-cash purchases were most common in Florida in October. Roughly half of the homes in Jacksonville (49.7%) were bought in cash in October. 

The lowest share of all-cash purchases was in the West coast market, especially in the Bay Area of California. Just 14.3% of home purchases in San Jose and 16.5% in Oakland were paid in cash. 

FHA Sees A Comeback

Redfin’s report also found that FHA loans bounced back. Roughly one in seven (14.6%) mortgaged home sales used an FHA loan, the highest share in nearly two years. That’s up from 13.1% a year earlier and a record low of 10.4% in April. 

Overall, Redfin says conventional loans are the most common for homebuyers, making up over three-quarters (78.5%) of all home sales that used a mortgage in October. That’s down from 80.5% a year earlier, but largely in line with where the share has stood since mid-2020.

The full Redfin report can be read here.

About the author
Staff Writer
Sarah Wolak is a staff writer at NMP.
Published
Dec 21, 2022
Realty Fees On The Rebound

Real estate commissions are trending back up, post-NAR settlement.

Feb 13, 2025
AI Muscles Into Homebuying

1 in 3 buyers now rely on AI during the mortgage process, survey finds.

Feb 13, 2025
Mortgage Applications Climb As Borrowers Chase Lower Rates

Refinance applications jump 10% to highest level since October

Feb 12, 2025
‘Uncertainty’ Marks Slowdown In Home Contract Activity

Some buyers and sellers think they can wait out economic volatility and poor affordability

Feb 11, 2025
Borrowing Costs Near All-Time High In California

Higher rates and home prices worsen California's long-term affordability challenges

Feb 11, 2025
Homebuying Pessimism Grows, Affordability Woes Persist

On the bright side, household incomes have achieved some stability

Feb 07, 2025