That's rich: Rise in all-cash transactions helping drive price gains for most expensive US homes
Well-heeled home shoppers are increasingly paying cash, helping turbo-charge price gains for the most expensive U.S. homes
LOS ANGELES — Well-heeled home shoppers are increasingly paying cash, helping turbo-charge price gains for the most expensive U.S. homes.
The median sale price of luxury homes, or those valued in the top 5% of the market nationally, hit an all-time high $1.23 million in the first quarter, an increase of 8.7% from the same period last year, according to an analysis by Redfin.
By comparison, the median sale price of non-luxury homes, or those in the middle-third of the market based on their estimated value, rose 4.6% from a year ago to $345,000, according to the report. Redfin didn't factor in price trends for homes with an estimated value in the bottom third of the market.
Rising mortgage rates have discouraged many would-be homebuyers and kept the U.S. housing market mired in a slump for most of the past couple of years.
Despite easing from a 23-year high of 7.79% in October, according to mortgage buyer Freddie Mac, the average rate on a 30-year mortgage has been hovering around 7% this year. That's still more than double the average rate's pandemic-era lows.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.
While elevated mortgage rates have limited the pool of prospective homebuyers in the broader housing market, demand for high-end homes has held up better than for middle-of-the-road properties.
Sales of luxury homes rose 2.1% in the first quarter versus a year earlier, while sales of properties in the
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