All Cash Offers Are At A Seven-Year High
Many surveys have shown an all-cash offer is the surest way to win a bidding war. The problem, of course, is most buyers – and especially first-time and entry-level buyers – don't have the savings necessary to make an all-cash offer. Despite this, they're becoming more common in today's market.
In fact, according to one recent analysis, all-cash purchases have accounted for 30 percent of homes sold so far this year. That's the highest number since 2014. So what's behind the trend? Well, a few things.
Recent stock market gains are one. Another factor is the number of people leaving cities and moving to more affordable areas in the suburbs and exurbs. These buyers can sell a highly priced home and then use their equity to purchase a more affordable home in another area.
Real-estate investors are also known for all-cash offers and they're increasingly returning to the market these days. Ultimately, wherever they come from, cash offers in a competitive market can present a challenge for buyers.
The good news is there are indications that the number of available listings are increasing, which should help reduce competition and the frequency of bidding wars.* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.