May 5, 2022 - Economy

Why it's so hard to buy a house

Data: National Association of Realtors; Chart: Axios Visuals

The proportion of homes being sold for cash — deals where the buyer isn't taking out a mortgage — hit a new high of 28% in March. That's the highest level we've seen since the post-crisis years, when a lot of home sales were foreclosures. (To buy a home out of foreclosure, you have to pay in cash.)

Why it matters: This is a sign that the housing market is still extremely tight, and that there's little hope high mortgage rates will bring down prices. After all, high borrowing costs do nothing to deter cash buyers.

What they're saying: "Cash sales are a sign of a hot market," says National Association of Realtors economist Gay Cororaton.

  • If you want to win a bidding war, making an all-cash offer is strongly advised in many markets. But for the overwhelming majority of Americans, it's also impossible.

The bottom line: It's now harder than ever to move from one home to another with the same value. Not only will the new mortgage cost you a lot more than you're currently paying, but even winning the bidding war for a new place will be hard if you need any kind of financing.

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