In recent months, we have seen an increase in the number of people paying cash for their newly constructed homes. This is more pronounced at the upper end of the market.
As of July 2022, only 14 percent of new-home buyers used cash to purchase their homes, according to Las Vegas-based Home Builders Research. Despite this, the number jumped to 22 percent in December and continued into 2023. According to Home Builders Research, that number fell to 19 percent in February.
In December 2020, cash buyers dropped to 10 percent of new home buyers after a steady increase in 2021.
Since last November 2022, there has been a significant amount of cash purchasing on the new home market. Accordingly, these buyers may have initiated their purchase in early to mid-2022, when the Federal Reserve has consistently raised interest rates.
In the past, cash purchases of a home were mostly associated with luxury homes. Currently, cash purchases of more affordable homes are on the rise.
Cash buyers of existing homes aren’t experiencing the same trend.
In the fall of 2021, 30-year fixed mortgage rates were below 3 percent; they increased throughout 2022 to surpass 7 percent last fall, but have since come back down to about 6 ¼ percent.
Many buyers are putting down more cash on a home than they previously would have. One Realtor said a recent buyer put down 80 percent cash and the rest was a mortgage loan.
Keep in mind that whether you are interested in buying a home or selling a home, a Realtor should represent you– this person is working for your benefit and will help you navigate through the buying or selling process. We have celebrated selling both New and Resale Homes for over thirty years…..
We are here to answer any questions you might have – just email jennifer@smithteamlasvegas.com
Thanks and make it a terrific day…………The Smith King Team
