Approximately 26.1 percent of all the homes sold in the Las Vegas Valley this March were all-cash purchases, according to a new study from Redfin.
This puts the valley just below the national average of 28.8 percent, according to the study. All-cash purchases of homes are down 1.8 percent overall in the valley year over year in March.
Just under three in 10 U.S. homebuyers paid in all cash in March, down from 29.8 percent a year earlier, according to the Redfin study, which is a tie with 2021 for the lowest March share since 2020.
The most recent high water mark of all-cash home purchases peaked at nearly 35 percent back in 2023 because Redfin said mortgage rates hit a two-decade high of almost 8 percent during that time.
“Buyers who could afford to were inclined to pay in cash to avoid sky-high monthly mortgage payments,” reads the report. “Now, the share of homebuyers paying in cash is declining because market conditions have shifted. While mortgage rates remain elevated well above pre- and mid-pandemic levels, they eased to 6.18 percent in March from recent highs of 7 percent or above.”
Residential real estate has been on a roller coaster ride in Las Vegas for decades, going through wild swings starting in 2008 during the Great Recession as the valley was one of the hardest hit metros in the country. This continued during the pandemic when interest rates bottomed out, kicking off a buying and selling frenzy, along with a wave of homebuyers refinancing their mortgage rates below 3 percent.
The report by Redfin noted the biggest influence on all cash purchases is usually the overall mortgage rate, as when it is higher more buyers try to avoid elevated rates.
“At the same time, the housing market is buyer-friendly–with many more sellers than buyers–in most of the country, meaning house hunters don’t need to use all-cash offers to stand out in bidding wars,” reads the report. “Widespread economic uncertainty–including concerns about the Iran war, rising oil prices, inflation and recession jitters–is also playing a role. When the economy is topsy turvy, even affluent buyers who can afford to pay cash may be inclined to preserve money in savings accounts or other investments rather than tie it up in a home. Some buyers are opting to finance their purchase to keep cash on hand in case of emergency.”
The report noted a drop in these types of buyers could signal the start of a return to a more healthy and balanced residential real estate market.
“All-cash purchases becoming less prevalent can be good news for typical house hunters because it eases a bit of competition from wealthier buyers. Cash buyers often have an edge because sellers see their offers as faster and less risky.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
