Paying For Your House In Cash

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Julia Zhu notes that in December, “all-cash purchases accounted for 42.1 percent of all U.S. residential sales, according to the latest report from RealtyTrac, a company that collects and analyzes housing data”:

There are a few things driving this. Last summer, interest rates on mortgages jumped sharply. And though rates are still low by historic standards, relatively higher rates make borrowing money a less appealing option. If you do want a mortgage, you might not be able to get one: Lending standards remain unusually tight, keeping lots of potential buyers out of the market.

Also, big, institutional investors have started buying up lots of homes and renting them out. They accounted for about 20 percent of the all-cash sales in December (and about 8 percent of home sales overall).