Nearly 30% of U.S. homebuyers paid in cash this August, about the same as last year, according to a Redfin analysis of sales across 40 major metros. Meanwhile, rising affluence among buyers pushed the typical down payment to a record $70,000.
Florida Leads the Nation in All-Cash Purchases, Miami in Top Three
Florida is topping all-cash purchases among other states, says the analysis. West Palm Beach saw the highest share of cash purchases, with 43.4% of homes sold without a mortgage. This was closely followed by Cleveland with 42.1% and Miami with 39.2%.
On the other hand, cash purchases were the least common in some of the expensive West Coast cities. That included Oakland at 18.8%, San Jose at 19.1%, and Seattle at 20.5%.
According to the Redfin analysis, the number of cash buyers has gone down from its peak, which was 35% two years ago. That peak occurred when mortgage rates topped 7%. With rates easing to around 6.3% this year, more buyers have opted to finance their purchases.
However, the overall share of cash deals remains steady compared to last year. Redfin added that softer competition has allowed first-time and mortgage-backed buyers to re-enter the market.
Down Payments Hit Record High
Down payments climbed to a record $70,000 in August, up 6.1% from a year earlier. The median buyer has been able to put down 18.6% of the purchase price, which is an increase from 17.8% from a year ago.
This is the largest August share since 2013. California led the ranking for down payments. Buyers in San Jose made the biggest down payment at $408,000. San Francisco followed closely with $400,000, and Anaheim with $300,000.
By contrast, buyers in Virginia Beach made the smallest down payments, averaging $9,000. Pittsburgh followed at $23,000, with Cleveland close behind at $27,000.
Redfin attributed the increase to wealthier, move-up buyers who use equity from previous homes to make larger down payments. Many affluent Americans are opting for sizable down payments instead of all-cash purchases as mortgage rates decline.
As the mortgage rates continue to dip below 6.3%, economists have predicted that the cash purchases will edge lower. Still, record-high down payments underscore how costly homeownership remains nationwide.
