All-cash home purchases are becoming more common across the U.S. housing market, especially among buyers who can afford to skip mortgage financing altogether. A new report from the National Association of Realtors (NAR) shows that elevated mortgage rates continue to reshape how homes are bought and who can compete.
For the past three years, more than one in four homes nationwide have been purchased with cash. According to NAR economists, this trend closely follows the sharp rise in mortgage interest rates after the pandemic.
Higher Rates Make Borrowing Less Attractive
Mortgage rates climbed rapidly between 2022 and 2025, moving from record pandemic lows to nearly 8% in late 2023. While rates have eased since then, they have remained mostly in the low-to-mid 6% range throughout 2025. That shift has made borrowing far more expensive than it was just a few years ago.
As a result, many first-time and lower-income buyers have been pushed to the sidelines, while buyers with strong savings or home equity have leaned into cash offers.
Harrison Polsky, a real estate agent with Douglas Elliman in Dallas, says rising rates clearly changed buyer behavior.
“As mortgage rates increased, buyers with access to capital increasingly chose to close with cash or cash-equivalent financing,” Polsky said. “For many, it’s a bridge strategy close as cash, then look at long-term financing later when terms improve.”
Home Equity Gives Repeat Buyers an Advantage
Existing homeowners have benefited from years of home price growth, building sizable equity along the way. That equity often allows them to make strong cash offers when buying their next primary home, a vacation property, or an investment property.
According to Realtor.com, all-cash buyers accounted for 29% of home sales nationwide as of October, up from 27% a year earlier and just 19% five years ago. Another Realtor.com study found that nearly one-third of homes sold in the first half of 2025 were purchased entirely with cash.
Hannah Jones, senior economic research analyst at Realtor.com, noted that cash buyers enjoy clear advantages, including avoiding high interest costs, skipping financing contingencies, and closing faster.
Why Sellers Prefer Cash Offers
From a seller’s perspective, cash deals reduce uncertainty. There is no lender approval risk, fewer delays, and a much higher chance the deal will close on time.
Polsky added that paying cash immediately strengthens a buyer’s position during negotiations. Sellers often see cash buyers as more reliable, which can matter just as much as price in competitive markets.
As Amethyst Marroquin, research assistant of member and consumer survey research at NAR, put it: when borrowing costs rise, cash becomes a more powerful and competitive option.
Who Is Buying Homes With Cash?
NAR’s Confidence Index shows that all-cash buyers are most often:
- Existing homeowners
- Vacation-home buyers
- Real estate investors
From January through October 2025:
- 57% of vacation-home buyers paid all cash
- 56% of investment buyers paid all cash
Realtor.com deed data also shows that institutional investors, often using LLCs or corporate entities, play a major role in cash purchases.
In contrast, cash plays a much smaller role in primary home purchases. Only 19% of primary residences were bought with cash, meaning the vast majority still involved financing.
First-Time Buyers Still Rely on Mortgages
For first-time buyers, cash is rarely an option. NAR’s Profile of Home Buyers and Sellers shows that just 8% of first-time buyers in 2025 made all-cash purchases. Most depend on mortgages to enter the market.
Repeat buyers, however, are increasingly using cash. About one-third of repeat buyers paid all cash in 2025 slightly lower than last year, but far higher than the 10% share seen in 2023.
What This Means for the Housing Market
The rise in all-cash purchases highlights a growing divide in the housing market. Buyers with equity, savings, or investment capital gain more leverage, while those who rely on financing face higher costs and stiffer competition.
Unless mortgage rates fall sharply, experts expect cash offers to remain a strong force in 2026 especially in markets popular with investors and vacation-home buyers. For now, cash continues to rule when borrowing stays expensive. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
