Luxury Home Prices Increased Due to Recent All-Cash Buyer Demand
Demand holds strong for Luxury Homes in Q3 as affluent buyers are choosing to make their purchases with all cash offers as a way to avoid higher interest rates being offered in the current market, reports Redfin.
According to the report, 43% of luxury home purchases are paid for in cash, which is a 35% increase over last year.
“Wealthy homebuyers have more tools to weather the storm of high mortgage rates,” reports Senior Vice President of Real Estate Operations at Redfin, Jason Aleem. “Many of them can afford to pay in cash, meaning they’re escaping high mortgage rates altogether. Others are choosing to take on a higher rate and refinance later—an expensive option that isn’t feasible for a lot of lower-income consumers. Affluent Americans are still spending big, in large part because of pandemic savings and resilient housing and stock values.”
In fact, luxury home prices rose 9% to $1.1M. At a growth rate of almost three times faster than non-luxury home prices, it was recorded as the highest third-quarter level on record, according to the report.