In the wake of rising interest rates, cash buyers are taking a bigger share of the home real estate market, both in St. Louis and nationally.
New figures from RealtyTrac show that 34 percent of home sales went to all-cash buyers in July. Cash buyers made up 40 percent of sales in the St. Louis metro area in July.
The percentage of all-cash sales is rising, both in St. Louis and across the nation.
For example, in St. Louis County, the rate of all-cash purchases hit 36 percent in July, up from 13 percent in June and 6 percent in June of last year.
“The recent uptick in interest rates could also be contributing to a higher percentage of cash purchases as some non-cash buyers can no longer afford to buy,” said Daren Blomquist, vice president at RealtyTrac.
Interest rates rose jumped by more than a percentage point in May and June to the current average of 4.51 percent for a 30-year mortgage, according to Freddie Mac.
In the St. Louis area, cash purchases ranged up to 53 percent of sales in Madison County in July, up from 33 percent in June. St. Charles County defied the trend toward rising cash purchasers, with cash funding 18 percent of July deals, down from 22 percent in June.
“Institutional investors” — mainly landlords — bought 10 percent of properties in July across the metro area. RealtyTrac defines an institution as a purchaser with more than 10 properties.
Foreclosed property made up 8 percent of sales and “short sales” were 6 percent. A short sale occurs when a bank allows a homeowner to sell the property for less than the mortgage debt, generally because the owner can no longer afford the payments.