24% of Homes Sold This Year Were Bought With All Cash, the Smallest Share in 13 Years
All-cash home purchases reached a low this year largely due to historically low mortgage rates
SEATTLE, Dec. 18, 2020 /PRNewswire/ -- (NASDAQ: RDFN) — Nationwide, 24.3% of homes sold so far this year were bought with cash, down from 25.3% in 2019 and the smallest share since 2007. This is according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. All-cash home purchases peaked in 2013, when 34% of homes sold were bought with cash. The share has generally declined since then.
Because of the pandemic-driven recession, mortgage rates are at record lows this year, dropping as low as an average of 2.71%.
"With interest payments lower than ever before, many homebuyers would prefer taking out a home loan and putting their cash somewhere else, like the stock market, emergency savings accounts or home renovations," said Redfin chief economist Daryl Fairweather. "Many of the buyers who are using all cash this year are probably trying to beat out other offers in a situation with multiple offers."
In Nassau County on Long Island, 48.9% of homes sold this year were all-cash purchases, a higher share than any other major metro area.
"Buyers are flocking to Nassau County from Manhattan and Queens this year, as the pandemic and remote work drives them away from the city and toward a more suburban area with spacious homes and backyards," said local Redfin agent Peggy Papazaharias. "A lot of buyers are paying cash because they want to beat out the competition, move quickly and get into their new house and new lifestyle as soon as possible. Nassau County is the closest suburban-feeling area to Manhattan, so it's a desirable location for remote workers and people who will eventually have to commute into the city one or two days a week."
Nassau County is followed by six Florida metros: North Port (41%), West Palm Beach (40.3%), Cape Coral (39.8%), Fort Lauderdale (33.4%), Miami (30.8%) and Tampa (30.1%).
Oakland had the smallest share of all-cash purchases, 13.1%, followed by Virginia Beach (13.8%), San Diego (15.1%), Denver (15.2%) and Portland, Oregon (15.6%). Oakland, where the typical home sold for $821,000 in October, is one of the most expensive housing markets in the country, and the median home prices in San Diego, Denver and Portland are all well above the national median of $336,000. High home prices is one reason for such a low share of all-cash home purchases in those places. The story is different in Virginia Beach, where the typical home sold for $265,000 in October and a lot of buyers use VA loans—which don't require down payments—to purchase homes.
"Virginia Beach, particularly Hampton Roads, has a large military presence, which means a lot of buyers are able to purchase homes using VA loans," said Virginia Beach agent Jordan Hammond. "Because buyers have many different loan types available in this area, all-cash purchases are relatively uncommon."
Metro area | Share of home sales that | Share of home sales that | Median sale |
Nassau County, NY | 48.9% | 36.2% | $530,000 |
North Port, FL | 41.0% | 42.9% | $325,000 |
West Palm Beach, FL | 40.3% | 42.8% | $334,000 |
Cape Coral, FL | 39.8% | 43.6% | $270,000 |
Fort Lauderdale, FL | 33.4% | 36.5% | $305,000 |
Miami, FL | 30.8% | 34.9% | $350,000 |
Tampa, FL | 30.1% | 33.6% | $269,900 |
Atlanta, GA | 29.4% | 31.7% | $285,000 |
Tucson, AZ | 27.6% | 28.1% | $265,000 |
Jacksonville, FL | 27.2% | 30.6% | $264,000 |
New Brunswick, NJ | 26.8% | 27.9% | $383,000 |
Phoenix, AZ | 26.1% | 28.8% | $339,000 |
Orlando, FL | 26.1% | 31.1% | $284,000 |
Las Vegas, NV | 25.8% | 29.1% | $317,000 |
Cleveland, OH | 25.6% | 26.6% | $177,000 |
New York, NY | 25.2% | 27.3% | $550,000 |
Warren, MI | 23.8% | 22.7% | $245,000 |
Cincinnati, OH | 23.7% | 23.2% | $216,000 |
Charlotte, NC | 23.2% | 28.4% | $297,000 |
Nashville, TN | 23.0% | 25.8% | $336,100 |
Oklahoma City, OK | 22.3% | 25.7% | $214,900 |
Seattle, WA | 21.6% | 20.4% | $635,000 |
Columbus, OH | 21.1% | 20.8% | $250,000 |
Anaheim, CA | 20.4% | 20.3% | $795,000 |
Chicago, IL | 20.1% | 22.6% | $275,000 |
Riverside, CA | 19.6% | 19.8% | $439,000 |
Raleigh, NC | 18.6% | 23.9% | $315,000 |
Minneapolis, MN | 18.5% | 21.1% | $315,000 |
Washington, DC | 17.9% | 14.1% | $457,700 |
Los Angeles, CA | 17.8% | 17.2% | $735,000 |
Sacramento, CA | 16.6% | 17.7% | $480,000 |
Baltimore, MD | 16.5% | 16.6% | $320,000 |
Portland, OR | 15.6% | 17.1% | $450,000 |
Denver, CO | 15.2% | 17.9% | $470,000 |
San Diego, CA | 15.1% | 16.2% | $660,000 |
Virginia Beach, VA | 13.8% | 13.4% | $265,000 |
Oakland, CA | 13.1% | 13.1% | $821,000 |
To view the full report, with additional charts and data, please visit: https://www.redfin.com/news/all-cash-home-purchases-smallest-share-since-2007
About Redfin
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country's #1 real estate brokerage search site, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we've helped them buy or sell more than 235,000 homes worth more than $115 billion.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email [email protected]. To view Redfin's press center, click here.
SOURCE Redfin
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