All-Cash Buyers and Their Impact on the Housing Market

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Cash buyers account for nearly a third of sales in the current real estate market, a trend that rose sharply during the COVID-19 pandemic and has held firm ever since. According to the National Association of Realtors (NAR), cash sales accounted for 29% of real estate transactions in October 2025. This is only a marginal increase from 27% in 2024.

In the first half of 2025, nearly one-third (32.8%) of home sales were all-cash transactions, which is significantly higher than pre-pandemic years when the average was 28.6%. This sustained increase highlights the lasting impact of pandemic-era trends on buyer behavior and the housing market.

The number of cash buyers in the market can impact mortgage-reliant buyers, while also affecting sellers. Even if the percentage of cash closings is stable, current buyers who need financing might wonder what this trend means for them.

The prevalence of cash purchases is especially pronounced at the extremes of the price spectrum, with two-thirds of homes priced under $100,000 and more than 40% of homes priced above $1 million being purchased with cash in the first half of 2025. This creates a U-shaped pattern in cash sales across the price spectrum, with high cash shares at both low and high price points.

This guide will dive into the presence of all-cash buyers and their impact on today’s housing market. Learn who these buyers are and if they could affect your purchase or home sale.

What Is an All-Cash Buyer?

Cash buyers differ from financed buyers in that they have enough money available to complete the home purchase. They do not need to apply for a loan to buy the house, which makes their offers stronger to sellers. Homeowners selling their properties often prefer cash buyers because they can close faster (they don’t need to wait for the buyer to complete the mortgage underwriting process) and because there isn’t any risk that the deal will fall through because of financing. Cash buyers often have a competitive edge in both lower-priced and luxury home segments, where their ability to close quickly and avoid financing contingencies is especially valued by sellers.

A cash offer doesn’t always mean that the seller receives more money. Instead, it often means there are fewer contingencies. The buyer may have fewer requirements because they don’t have to complete lender requests, and might even be willing to skip appraisals and inspections if they want the home badly enough. This further streamlines the sale process for homeowners.

Who Are Today’s All-Cash Buyers?

All-cash buyers are not a single group; they comprise different demographics throughout the housing market. Here are a few types of buyers that might make offers in your local market with cash.

• Investors who rent out or remodel properties as a form of income. These buyers might seek out distressed homes or purchase properties in desirable areas to make them short-term rentals.
• High-wealth buyers who have saved significantly over the years, invested strategically, or inherited funds from a relative.
• People moving from a high-cost-of-living (HCOL) area. These buyers may have sold their homes and have enough profit to make cash bids in more affordable communities.
• Retirees who are downsizing. These people may have sold their larger family homes now that their kids have moved out. This gives them enough equity to buy smaller houses outright.
• Second home purchasers, especially in high-cost, lifestyle-oriented markets like Hawaii and Maine, who often pay in cash for vacation or investment properties.
• Out of state buyers, who may be seeking vacation homes or investment opportunities and frequently use cash to secure properties in competitive markets.
• Institutional buyers, such as investment firms and real estate companies, who purchase homes in bulk or as part of investment portfolios.
• Older households, who often use accumulated equity from previous home sales to make cash purchases.

Cash buyers include not only investors and high-wealth individuals, but also older households leveraging accumulated equity, institutional buyers, second home purchasers, and out of state buyers seeking vacation or investment properties. Older households and high-wealth buyers often dominate competitive bidding situations due to their ability to deploy significant equity quickly. First-time homebuyers are at a disadvantage because they lack the home equity that investor buyers and older households can easily deploy.

Cash offers aren’t necessarily scams. Sellers don’t have to worry that they are being tricked or low-balled if a buyer proposes a cash deal. While a seller should review every offer carefully, a cash bid could come from high-wealth buyers with significant equity who simply don’t want to take out a mortgage.

Why All-Cash Sales Become More Common When Rates Rise

Mortgage rates have risen significantly in the past decade. They peaked around 5% in 2019, and then plunged because of the COVID-19 pandemic. For the past few years, mortgage rates have hovered between 6-7%.

When mortgage rates increase, loans become more expensive, potentially pricing some buyers out of the market. For example, the monthly payment for a $300,000 loan comes out to around $1,400 per month for a 4% interest rate, and $1,800 for a 6% interest rate. These calculations also don’t factor in property taxes and homeowners’ insurance costs.

When you look at an amortization chart, a buyer with a 6% interest rate will pay $132,000 more over in interest over the lifetime of a 30-year loan compared to a buyer with a 4% interest rate.

When mortgage rates rise, some financed buyers will leave the market because home purchases are too expensive. They may continue renting or avoid selling until mortgage rates fall. Cash buyers are less sensitive to rate changes because they don’t need to apply for loans. High-wealth buyers are less influenced by borrowing costs and often make financing based decisions that consider broader financial considerations, such as investment strategy and overall financial health. They will remain in the market and might even increase in number to take advantage of shifts in demand. If lower borrowing costs return, more financed buyers could enter the market, potentially reducing the dominance of cash buyers.

Sellers also tend to favor cash bids when interest rates rise. They don’t have to worry that the buyer will be denied financing due to higher rates exceeding the lender’s target debt-to-income ratio.

How All-Cash Purchases Impact Home Prices

When cash sales increase in a particular area, they can impact the local market. Scarce listings and limited inventory can intensify competition among cash buyers, especially at the extremes of the price spectrum. Cash transactions are often concentrated at both the lower and higher ends of home prices, with more activity in affordable homes below $100,000 and luxury properties over $1 million. The dominance of cash buyers extends beyond individual sales to the broader structure of local housing markets, influencing pricing and competition. Cash purchases can increase competition for homes, creating a seller’s market. Homeowners might be less willing to negotiate lower prices or work with mortgage-reliant buyers because they think they will receive a favorable cash offer.

High-wealth buyers paying in cash can drive up prices if they aren’t afraid to enter bidding wars. They can make offers above the listing price and keep exceeding other offers until they win the deal. When a local agent pulls recent sales for a comparative market analysis (CMA), the bidding wars can make the market seem more elevated and competitive than it previously was.

That said, cash deals don’t always drive up market prices. It all depends on the neighborhood, regional home prices, existing supply of homes, and the current market. Your real estate agent should use a CMA to identify average home prices in the area and help you set a fair listing price to sell – or a reasonable budget to buy.

The Impact on Homebuyers Using Financing

When the number of cash transactions increases in the local market, mortgage-dependent buyers often feel disadvantaged. It’s emotionally taxing to lose out against all-cash bids, especially as buyers search for houses and find properties they love enough to make offers on. In an already challenging affordability environment, some buyers might feel like they are being pushed out between the rising home prices, high interest rates, and competitive cash bids.

If two bids make the sale offer, but one is a cash buyer, the financed buyer often loses because the sale will take longer and have more contingencies. Cash doesn’t automatically mean “unbeatable,” but it is less likely that the seller will choose the riskier bid.

What Cash Transactions Mean for Home Sellers

While competing against all-cash transactions can be stressful for buyers, these bids are exciting for sellers. Cash bids often mean flexible closing dates, less risk that the deal will fall through, and limited contingencies. Essentially, the seller will have to jump through fewer hoops to make the lender happy about the condition of the house. 

However, some investors and wealthy individuals know what a powerful competitive advantage cash home sales can be. They might submit lower offers than other bidders who need financing. The homeowners then need to decide whether they are willing to accept a lower price on their home in exchange for the certainty that the deal goes through. 

Sellers need to do their due diligence on every offer to find the best one. A buyer who needs financing might make a stronger bid if they offer a higher price and prove their financial stability. Many buyers have high credit scores, existing equity, and sound finances that make securing a loan easy. A patient seller might prefer working with a buyer who needs financing so they can secure a higher profit at the closing table. 

Are All-Cash Deals Making Homes Less Affordable?

Cash transactions alone aren’t responsible for changes in the housing market. Several factors contribute to affordability perceptions, ranging from housing supply to employment rates. However, many buyers blame cash bidders for the competitive housing market, especially if their region has a high number of investors. Cash sales underscore how competitive some markets can be.

Job centered markets, which are often high-cost and dominated by younger professionals, tend to have lower cash shares compared to markets with more investor or second-home buyer activity. The proportion of home sales completed with cash payments—known as cash shares—reflects local market dynamics, buyer demographics, and economic factors, serving as an indicator of wealth concentration and investor activity.

Senior economic research analysts believe there is a shortage of 4.7 million homes in the United States. Cash sales underscore this lack of supply when first-time homebuyers are outbid by investors looking to add to their rental portfolios. Other finance-reliant buyers might feel frustrated in areas with a large number of affluent second-home buyers. These equity-rich households can outbid locals in popular vacation destinations, potentially driving up housing costs.

Where Cash Home Sales Have the Biggest Impact

Every housing market is different, which means the number of cash purchases (and who is making the offers) will vary between states, cities, and even neighborhoods. Investors account for about 20% of total sales, with the highest number of investor-owned homes located in Alaska, Hawaii, Maine, and Montana. CNBC highlights how these states have significant tourism economies, which attract both investors looking to operate short-term rentals and wealthy individuals purchasing vacation homes.

In the first half of 2025, Mississippi had the highest all cash share of home purchases at 49.6%, followed by Montana (46%), Idaho (45%), Hawaii (44.9%), and Maine (44.4%).

Among U.S. metros, Miami (43%), San Antonio (39.6%), Kansas City (39.2%), Birmingham (38.8%), Houston (38.8%), and St. Louis (38.1%) had the highest cash shares in the first half of 2025.

In contrast, younger, high-cost, job-centered markets such as Seattle (17.9%), San Jose (20.6%), Denver (20.7%), and Washington, D.C. (21.5%) had the lowest cash shares.

Overall sales volume and the distribution of homes sold across price points influence the prevalence of cash transactions, with cash shares especially high in markets with limited access to credit and high investor activity.

Areas of high wealth concentration and luxury markets also tend to have higher cash closings. However, luxury listings usually won’t affect other parts of the market and make up a smaller percentage of total closings. Investor activity in areas with starter homes can have a bigger impact on finance-reliant buyers, because people entering the market for the first time are more likely to get pushed out.

How Buyers Can Compete with All-Cash Bids

Buyers don’t have to despair if they are placing bids in an area with a lot of all-cash transactions. There are ways to help your offers get noticed against offers with significant equity. Here are a few ways to stand out against the powerful competitive advantage that is cash. 

• Get pre-approved. A strong pre-approval shows that you are likely to get the financing you need. 
• Be transparent about your finances. This applies both to your lender and the seller. Showcase your strong credit score, high down payment, and reliable work history. All of these factors make you a desirable borrower. 
• Be flexible where you can. Set a closing date that works for both you and the seller. For example, many families want to move before the new school year starts so their kids don’t have to switch districts mid-year. 
• Know what matters to the seller. Some people want to move quickly, while others want fewer repair requests post-inspection. Show that you are willing to meet the seller where they are. 

This is where hiring an experienced real estate agent comes in. The right Realtorcan communicate with listing agents and learn about the homeowners. They can help you make competitive offers that get noticed. They can’t guarantee your bid wins, but they will do their best to help you find a home you love.

How a Local Real Estate Expert Levels the Playing Field

Buyers who need financing can still find homes during periods of high investor activity. Some real estate agents specialize in working with buyer demographics that need to secure loans or who are entering the market for the first time. They enjoy helping their clients in winning bidding wars and getting their offers noticed. Here are a few ways a trusted Realtor can help you, such as handling situations if your buyer wants access to the property before closing.

• Building your offer’s strength. Your agent can look for flexible ways to make your offer stand out, even if you cannot bid above the listing price. 
• Positioning buyers competitively. Some agents love competitive situations and developing creative ways to make your offer stand out. This can give buyers confidence when bidding. 
• Communicating clearly with listing agents. A good buyer’s agent can make the sale seamless. Clear communication can keep a seller engaged and at the table. 

Your agent can also help you find high-potential homes that meet your needs but might not attract investors. They might even have access to pocket-listings or upcoming properties through their network. This can reduce competition during the bidding process.

Cash Buyers Are Influential, Not Invincible

Cash remains one of the best ways to make an offer stand out on a home, but buyers who need financing can still win deals over all-cash transactions. Even if you live in an area with high wealth concentration or a large number of investors, you can make strategic bids and get noticed. 

Start your home-buying journey with FastExpert. Compare local real estate agents who understand your market and can help you craft winning offers and navigate today’s competitive housing landscape with confidence. You can get noticed against all-cash sales. Find an agent today through FastExpert and take the first step to enter the housing market.