Cash offers for homes reach near decade high in September
The current 30-year fixed mortgage rate is 7.88%
Real estate agents advise homebuyers, sellers ‘strike while the iron is hot’
Texas REALTORS Chairman Marcus Phipps and Arizona REALTORS Vice President Sindy Ready speak with FOX News Digital about hot trends in their housing markets and share their best advice for Americans who may want to buy or sell a home.
Over 30% of homebuyers are paying cash, allowing them to skirt interest.
In September, about 34.1% of home purchases in the U.S. were all cash, which is up from the 29.5% reported a year earlier, according to data from technology-powered brokerage Redfin.
September also marked the highest share of all-cash purchases in nearly 10 years, the brokerage reported.
Redfin reported that all-cash purchases haven't been this common since 2014 when affluent buyers and corporate investors led the housing market recovery after the housing bubble burst in 2008.
HOMEBUYERS NATIONWIDE FEELING THE IMPACTS OF RISING INTEREST RATES
For those that can afford it, buying a home in cash becomes more attractive in a market where mortgage rates are hovering under 8%.
In September, when the number of cash purchases reached a near decade high, the weekly average 30-year fixed mortgage rate hit 7.2%, which was the highest level in two decades. In October, rates neared 8%, forcing monthly mortgage payments up about 20% from a year ago, the brokerage reported.
Although rates have eased slightly, sitting at 7.88% for a 30-year fixed rate as of Nov. 8, they are still more than double the levels seen during the early days of the pandemic.
A for sale sign is posted in front of a home for sale on February 20, 2023 in San Francisco, California. (Justin Sullivan/Getty Images / Getty Images)
US HOUSING MARKET: EXPERT SAYS ‘ALL HOPE IS NOT LOST’ FOR POTENTIAL HOMEBUYERS
These rates are "exacerbating inequality between people who own homes and people who don’t," Redfin Senior Economist Sheharyar Bokhari said.
Today prices for homes are up 40% compared to before the pandemic buying boom, and borrowing rates "made the divide even bigger by adding more to monthly payments," Bokhari said.
A for sale sign is posted in front of a home on March 22, 2023 in San Anselmo, California. ( Justin Sullivan/Getty Images / Getty Images)
Homeowners who are being pushed out of the market due to high prices and rates "not only can’t afford a home now, but they’re not building wealth through homeownership for the future," Bokhari added.
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In fact, economists project 2023 will mark the slowest home sales year since the housing bubble burst in 2008.