Cash Home Buyer Statistics 2021-2020
Getting loans to afford a home has become commonplace today. People worldwide would wait for years to improve their credit scores and qualify for a mortgage with competitive interest rates.
However, there are still some people who would choose to purchase a home using their hard-earned money. In fact, the number of people using cash to buy properties has grown steadily for the past years. These numbers might come as a surprise for many.
This article will discuss eight cash home buyer statistics and how these numbers impact the real estate industry today.
- All-cash sales now make up about 36% of the market.
- In April 2021, the share of all-cash sales to existing home sales surged to 25% as non-first-time home buyers are paying cash to increase the competitiveness of their offers.
- A study conducted by Goldman Sachs concluded that investors drive the most number of all-cash home sales (57%).
- According to com, Reno, Nevada, is this year’s top emerging real estate market because 51% of the investors here are paying properties for cash.
- Although mortgage rates have set record lows 14 times so far this year, cash sales are still climbing more dramatically in the Northeast and Western regions, up to 3% and 2%, respectively.
- Cash sales for vacation homes have also risen to 8% in April of 2021, from 6% normally.
- From April 2018 to April 2019, only 12% of primary residence buyers are paying with cash, but the share increased to 15% as of April 2021.
- Because the cost of renting has gone up by 66%, individuals would choose to save up money to afford a home in cash.
1. An Easier Process
More and more people are buying a home for cash because this process appears to be easier. When you buy a home using cash, you don’t have to go through the process of finding and securing a loan. Paying with cash will also eliminate mortgage payments.
2. Cash Increases Competition
For home sellers to get the best price for their properties, they would usually let interested home buyers compete for it. Generally, a property will be granted to you if your offer is higher than the other interested buyers.
Paying with cash will increase a homebuyer’s chances of securing a home. Aside from being able to close the sale fast, paying in cash will also allow the seller to get the profits from their property as soon as possible.
3. Investors Make Up a Large Portion of Cash Buyers
Aside from real estate investors, wealthy Americans and downsizing retirees also account for all-cash home sales. These three groups are large enough to maintain the housing surge long-term.
4. Reno Is a Hotspot For Cash Buyers
Reno has become the “Biggest little city in the world” as the city has become a haven for cash buyers. Most of the individuals buying homes for cash in Reno, Nevada are retirees and tech workers. Data also shows that most of the large cash buyers in Reno are from California.
5. Paying Cash Saves Fees
Mortgage rates are at an all-time low, yet many people are still buying homes in cash. Many are still doing the latter because paying in cash will save them from paying appraisal fees, mortgage origination fees, and other fees charged by the lenders to the buyers. In short, many people are buying homes with cash in order to save money in the long run.
6. Rising Cash Sales For Vacation Homes
Homebuyers are now investing in vacation homes to use the property as their home offices or second homes. People working from home make up the most number of individuals buying vacation homes for cash.
7. Cash Buyer Numbers Continue to Increase
Despite the pandemic, more people are still buying homes in cash. This decision is often triggered by different factors, namely safety, affordability, and space.
8. Rent Costs Rise — So Do Cash Buyers
Renting a home is convenient for many, but the cost has drastically increased through the years. In fact, renting a home is far more expensive than buying a property. The long-term cost of renting a home is one of the reasons why more people are saving money to buy a home in cash.
If you have sufficient financial resources, you may consider buying your next (or first) residential property in cash. Aside from contributing to the growth of all-in cash sales in the real estate industry, buying a home in cash will also allow you to live without mortgage payments.