Why 1 in 4 Home Buyers Are Paying All Cash (And Where That Money Is Really Coming From)
When you look at today’s housing market, it is easy to assume everyone is facing the exact same challenge: high mortgage rates and soaring prices. But according to real estate leader Ryan Serhant, CEO of SERHANT, we aren't actually dealing with just one single housing market right now.
We’re living in four distinct markets at once:
Cash buyers
Buyers who need a mortgage
Homeowners locked into ultra-low mortgage rates
Home builders
Today, let’s zoom in on that first group: cash buyers.
According to recent data from the National Association of Realtors (NAR),27% of homes sold in September were bought with all cash. That is more than 1 out of every 4 home purchases nationwide.
When you hear a stat like that, it’s easy to imagine deep-pocketed institutional investors buying up entire neighborhoods. But the reality is very different—and much closer to home.
Who Is Actually Buying Homes with All Cash?
Social media often makes it seem like massive corporate buyers are dominating the market. However, NAR’s data shows that cash buyers primarily consist of three groups:
Existing Homeowners using equity from a home sale to fund their next purchase
Second-Home & Vacation Home Buyers
Individual Investors
The biggest takeaway? A significant portion of today's cash buyers are everyday homeowners just like you.
The Hidden Power of Home Equity
If you already own a home, you might be sitting on far more purchasing power than you realize. According to Cotality, the average homeowner with a mortgage currently holds about $310,000 in home equity.
Many homeowners feel "locked in" right now, hesitating to sell because they don't want to give up a 3% or 4% interest rate for today’s higher rates. But once they calculate their home equity, many discover a game-changing alternative: they can buy their next home outright with cash.
Why Buying with All Cash Changes the Game:
Zero Monthly Mortgage Payment: Eliminate your largest monthly expense.
Interest Rates Become Irrelevant: Today's borrowing rates no longer dictate what you can afford.
Faster Closing Times: Without a lender’s approval process, you can close deals quickly and stand out to sellers.
What if your equity doesn't cover the full price? Even if you can't pay 100% cash, putting a larger down payment from your equity means borrowing significantly less—resulting in a much smaller, far more manageable monthly payment.
Location Matters: Where Are Cash Buyers Most Active?
Cash buying isn't happening equally across the country. How much cash buyers impact your area largely depends on local real estate dynamics.
For instance, data from Realtor.com highlights that cash purchases represented nearly 47% of sales in Mississippi and 46% in Montana earlier this year.
States with the highest concentration of cash buyers usually feature a unique mix of:
Affordable entry-level home prices
Popular retirement destinations
High demand for second or vacation homes
Depending on where you live, you might encounter significantly more—or far fewer—cash buyers than the national average.
Don't Panic: Most Buyers Still Use a Mortgage
If all this talk about cash buyers makes you feel like you can't compete, take a breath: you are still in the majority.
Nearly 3 out of 4 home purchases in the U.S. still involve a traditional mortgage.
In fact, for mid-tier homes priced between $200,000 and $750,000, Realtor.com reports that only about 1 in 5 transactions are cash sales.
That means the vast majority of people buying everyday homes are financing their purchases—just like you. You are not at an automatic disadvantage simply because you’re using a loan.
What Does This Mean for Your Next Move?
If you already own a home: You may have enough equity to make your next move far easier and cheaper than you thought possible.
If you're buying with a mortgage: You're in good company. Financing remains the most common way to buy a home today.
The key lesson? Don't make decisions based on broad national headlines or assumptions. What matters most is your personal equity, your budget, and local market trends.
Bottom Line
Cash buyers represent a meaningful slice of today’s market, but they certainly aren't the whole picture.
Whether you're hoping to put your built-up equity to work or planning to finance your next purchase with a mortgage, a knowledgeable local real estate agent can help you figure out how much equity you hold, who is buying in your neighborhood, and what that means for your next move.
