Cash Buyers Act as Mortgage Rates Increase

According to RealTrac about 40 percent of the homes sold in July of this year were all-cash transactions this is a 31% increase from a year ago.

Markets in Dallas, St. Louis, Los Angeles, Seatlle and Phoenix lead the nation in these types of sales.  Other markets saw significant gains as well from a year ago.²

Real Estate Market watchers such as RealtyTrac, Zillow, and Trullia all seem to agree that mortgage rate increases seen recently have contributed to a slowdown in traditional home sales but are contributing to the surge in all-cash transactions.  As one might expect investors and hedge funds make up the majority of these buyers, however, RealtyTrac argues that there are many homeowners who, because of lower prices, can afford and are buying their homes without traditional bank financing.²

Short sales accounted for many of these sales; however, short sales have not seen any significant increase from a year ago according to Dean Bloomquist of RealtyTrac.¹

In other markets that lack the big institutional buyers and all-cash home buyers, traditional sales continue to a show a certain amount of slow down.  In markets like these, owner financed properties still have an advantage because of the shorter time on the market and because of higher than average sale price.

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This information is intended to be used as a general guide.  It is not intended to constitute legal advice and is not a substitute for the advice of an attorney.  While every effort has been taken to present the information accurately, this document may not be infallible.  No warranty is made that these materials are current, complete, accurate, or suitable for any particular purpose.  You should seek advice from your attorney before proceeding with any real estate transaction.

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