This is what’s driving buyers toward cash home purchases
Rising mortgage rates since the pandemic have made all-cash home purchases increasingly appealing for buyers who can afford them. From 2022 to 2025, rates surged from record lows to peaks near 8% in 2023, settling in the low- to mid-6% range in 2025, which has squeezed first-time and lower-income buyers out of some markets. In contrast, existing homeowners with substantial equity have been able to make cash offers, giving them a competitive advantage. Nationwide, all-cash buyers accounted for 29% of home sales in October 2025, up from 27% the previous year, with vacation homes, investment properties and repeat primary residences being the most common targets. Cash purchases provide benefits such as avoiding financing costs, faster closings and stronger negotiating power.
All-cash buyers are typically older and wealthier than those relying on mortgages, often funding purchases through home equity or sales of previous properties. The share of cash sales varies regionally, with cities like Miami, San Antonio and Houston seeing particularly high proportions due to strong investor activity and market conditions. While first-time primary homebuyers rarely pay entirely in cash, repeat buyers and institutional investors increasingly use cash offers to navigate high rates and compete in competitive markets. Overall, all-cash transactions represent a significant force in shaping the housing market, influencing prices, competition and the dynamics of affordability.
