An increase in all cash transactions increases the price of luxury homes

Wealthy homebuyers are increasingly paying cash, helping to drive up prices for the most expensive homes in the United States.

According to Redfin analysis, the median sales price of luxury homes (top 5% of national market prices) reached an all-time high of $1.23 million in the first quarter, an 8.7% increase from the same period last year. That’s almost double the growth in luxury homes.

For the one-third of homes on the market, the median sales price rose 4.6% from a year ago to $345,000, the report said. Redfin does not consider price trends for homes with estimated values ​​in the bottom third of the market.

One reason for the difference in sales data is that wealthier homebuyers are more likely to have the financial flexibility to bypass financing hurdles by paying cash. This trend is helping to accelerate home sales prices for the most high-end housing at a faster rate than for less expensive properties.

About 46.8% of luxury homes were purchased with all cash in the three months ended February 29, according to Redfin data. This is the highest proportion of all-cash luxury home purchases in at least a decade, up from 44.1% a year ago.

While high-end listings have grown significantly this year, prices for the most expensive homes continue to rise. All told, the number of luxury homes on the market rose 12.6% year over year in the first quarter, while new listings rose nearly 19%, Redfin said.

By comparison, inventories, one-third of the market, fell 2.9% year over year from January to March. Home prices are increasingly unaffordable for the average American, in part because inventory remains low.

Homeowners have Hesitating to sell Because they will face buying another property at today’s high mortgage rates Their home equity increasesAn increase in wealth makes them more reluctant to give up.

The report shows that luxury home sales rose 2.1% year over year in the first quarter, while sales in the middle third of the market fell 4.2%.

Buying a house At least more expensive than at any time in the last decadeMr Redfern said homebuyers were suffering the double whammy of rising mortgage rates and rising house prices.