HousingWireHousingWire
Homebuyers can purchase properties in full with cash, eliminating the need for a mortgage application. But last year, only one-third of buyers purchased homes with cash, representing a three-year low point.
In total, 700,445 homes in 2024 were purchased with cash, which is down from 760,914 in 2023.
Real estate marketplace Redfin released a report on Tuesday that included county-level sale records for homes purchased between January 2014 and December 2024. Redfin analyzed the country’s 50 most populous metro areas, although it only included 40 metros in the report.
According to Redfin, 32.6% of homebuyers used cash to purchase their homes in 2024. That’s down from 35.1% in 2023, and it’s the lowest level in three years.
Despite that, all-cash home purchases were more common last year than before the COVID-19 pandemic. Back then, anywhere from 25% to 30% of transactions were of the all-cash variety.
Redfin attributes the decline in cash purchases to a smaller share of real estate investors in the marketplace. Still, “wealthier Americans” are most likely to purchase homes with cash, Redfin said.
“The rate of all-cash sales remains high because when housing is expensive — like it is now — wealthier Americans who can afford to pay cash are more likely than lower-income Americans to be buying homes,” Redfin senior economist Sheharyar Bokhari said in the report.
“We are unlikely to see the share of all-cash purchases fall much lower in 2025, unless mortgage rates drop enough to drive a significant increase in sales.”
In 2021, more than 1 million cash purchases hit the housing market. That was the highest volume dating back to 2014. The next highest figure was in 2018 when more than 861,000 homes were purchased entirely with cash.
Real estate investors stormed the housing market in 2021 once pandemic-driven concerns dissipated. According to a Realtor.com report, investor home purchases ramped up by 52.9% in 2021. This growth has dwindled since then due to rising home prices and mortgage rates.
Florida led all states with the most all-cash home purchases in 2024, according to Redfin. The Sunshine State had four of the top metro areas with the highest all-cash purchase shares — each of which exceeded 38%. Cleveland also made the list as 40% of home sales there consisted of all-cash deals.
Meanwhile, pricier metro regions had lower shares of all-cash buyers. California had three of the five metros with the lowest shares of all-cash purchases. These areas included San Jose, Oakland and Los Angeles. Seattle and Virginia Beach, Virginia, were also among the five metros with the lowest shares of all-cash purchases.
