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birb_cromble  4d ago (text post)   964 thread views

Qeekly Finance Thread - 2026-11-07

A weekly thread to discuss financial matters - from personal all the way up to global.

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According to ChatGPT, about 27% of home purchases are all cash.

Is this broken down by type of purchase (e.g. vacation house; multi-unit investment properties; etc.?) My guess is that for your typical modest home in the suburbs of a large city, the percentage of buyers who finance is significantly higher than 73%.

But not in the short term. In 2022, going by memory here, you could still get a mortgage for like 3% while inflation was hitting 9%.

Right, so it seems to me that raising interest rates might effect mortgage interest rates one way in the short term but another way in the long term, right?

My guess is that for your typical modest home in the suburbs of a large city, the percentage of buyers who finance is significantly higher than 73%.

The average home buyer if 58 years old. 💀 If anything, 27% all cash seems low.

High interest rates help the old at the expense of the young.

The average home buyer if 58 years old.

Again, I would like to see this broken down. Anecdotally, I am in my 50s and I just bought a vacation house in a beach resort area. Which brings up the average age but I'm not really competing with the sort of people who need to borrow money to buy a house.

High interest rates help the old at the expense of the young.

If you mean mortgage interest rates and you are strictly looking at buyers, then I agree, although I am not sure as to the size of the effect. With interest rates as set by the central bank, it's not as clear. And of course a lot of sellers are older people. For them, higher mortgage interest rates are arguably bad.

Isnt this basically selling A for cash, buying B using that cash? If youre moving from owned house to owned house, or downsizing, theres no reason to take on debt.

Isnt this basically selling A for cash, buying B using that cash? If youre moving from owned house to owned house, or downsizing, theres no reason to take on debt.

I'm not sure I understand your point here. Are you suggesting that a lot of cash buyers for houses are getting the cash from the sale of their previous property?

I think so? A significant number of transactions are retired couples selling their expensive "growing family sized" house in a large city's suburbs to either move to a house better sized (and easier to take care of) for an aging couple, or moving to a nice place further away from the city to enjoy a quiet retirement. The second house is presumably more than covered in cash by the first one, since it's either smaller or further away from the city. The difference in price funds their retirement activities.

I think so? A significant number of transactions are retired couples selling their expensive "growing family sized" house in a large city's suburbs to either move to a house better sized (and easier to take care of) for an aging couple, or moving to a nice place further away from the city to enjoy a quiet retirement. The second house is presumably more than covered in cash by the first one, since it's either smaller or further away from the city. The difference in price funds their retirement activities.

Yeah, I would guess that's a pretty common scenario. And that's just the sort of segmenting I would like to see with respect to the 27% figure.

Yes.

Yes.

Ok, and how does that play into the affordability crisis, or whatever you want to call it?

For one thing I guess it means that there's a pool of buyers (current homeowners) who are not sensitive to interest rate or other affordability concerns when looking at houses -- so demand does not (necessarily) exceed supply?

No idea. I'm not OP, just an annoying guy with a theory about why 27% of sales being non-financed is reasonable.

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