All-Cash Buyers Dominate The Housing Market

Core Insights - All-cash buyers are significantly influencing the U.S. real estate market, with nearly one-third of home sales in the first half of 2025 being all-cash transactions, a trend that continues from the pandemic era [2][6] - The prevalence of all-cash purchases is exacerbating the affordability crisis, particularly affecting first-time homebuyers who are struggling against high mortgage rates and limited housing inventory [3][4] Market Dynamics - All-cash transactions accounted for approximately 33% of home sales in early 2025, slightly down from the previous year but still above pre-pandemic levels of 28.6% [2][6] - High mortgage rates, which remained above 6.5% in the first half of the year, have made it difficult for many potential buyers to enter the market, giving an advantage to those with significant equity or wealth [3][6] Buyer Behavior - The report indicates a U-shaped pattern in cash purchases, with two-thirds of homes priced under $100,000 and 40% of homes over $1 million being bought with cash, while more than half of homes priced above $2 million were also cash transactions [5][6] - Older homeowners and buyers with significant equity are more likely to make cash purchases, while high-wealth buyers are less affected by borrowing costs and focus on broader financial considerations [7]