Luxury Home Sales Are Skyrocketing Thanks to All-Cash Buyers, a New Report Says

Wealthy house hunters in the U.S. armed with stacks of cash have been on a spending spree this year. Despite a tough real estate market and slow selling season, the luxury sector is booming thanks to a surge in cash deals, according to a new report by Bloomberg . While many prospective buyers find themselves put off by record-high interest rates and rising home prices , the top end of the market has experienced an increase in activity.

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“Historically, higher priced homes are the first to feel the hit when interest rates rise,” Ali Wolf, chief economist for residential construction firm Zonda, told Bloomberg. “We aren’t seeing that today. High home equity and the strong stock market have acted as a buffer against interest rates for wealthier Americans.”

Most recently, in June, homes worth more than $1 million saw an uptick in sales—the only price category to record a spike, per the National Association of Realtors. There’s also been a jump in the number of all-cash offers. In the first quarter of the year, 45 percent of affluent homebuyers in the U.S. used cash to purchase property, according to data from Redfin. For context, this was the biggest share on record in at least 10 years and a 44.1 increase compared to a year earlier.

“I can’t remember the last time I heard a buyer talk about financing,” Lisa Rooks Morris, a Florida-based broker at Douglas Elliman, told Bloomberg. “They all come in with cash.”

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Another reason for the boost in luxury sales is an increase in inventory. According to Redfin’s Q2 report , luxury inventory rose 9.7 percent year-over-year and the number of new listings skyrocketed 11 percent. By comparison, the non-luxury market inventory only jumped 3.9 percent and had a 2.7 percent increase in new listings during that same period.

“People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise,” explained David Palmer, a Redfin Premier agent in the Seattle metro. “They’re ready to buy with more optimism and less apprehension. It’s a similar sentiment on the selling side: Prices continue to increase for high-end homes, so homeowners feel it’s a good time to cash in on their equity. Even though mortgage rates remain elevated and demand isn’t as high as it was during the pandemic, many homebuyers and sellers feel the worst of the housing downturn is behind us.”

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