Right now, more and more buyers and investors are upping the home-buying competition by coming in with cash on hand. In fact, a third of all U.S home sales in the second quarter were sold to cash buyers. This was up 20.6% from the year prior. In fact, this was the highest percentage since the first quarter of 2015.
Ever since the pandemic started, remote work has allowed some homeowners to sell their homes in high-priced markets and relocate to less expensive areas. Because of this, a lot of buyers have cash in hand for a new home.
In addition, right now investors are increasing their presence in the housing market. In May, investor home purchases accounted for 17% of existing homes sales.This was up from 14% the year before. Sales to investors or second-home buyers have accounted for the biggest chunk of cash sales. During May, all-cash sales accounted for 23% of transactions.
This increase in cash sales has made it somehow difficult for first-time homebuyers and lower income buyers to compete. This is because cash offers are very attractive during bidding wars. Demand all over is very high, and cash offers are very attractive to sellers.
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