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birb_cromble  7d ago (text post)   1165 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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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?

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?

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

To some extent, this makes sense. But I think it depends on (1) the types of houses these people are buying; and (2) to what extent people are trading up, so to speak.

So for example, suppose an empty nest type couple sells their house in the NYC suburbs and uses the proceeds to buy a house in a retirement village in Tennessee. Arguably this isn't going to have a big impact on the affordability crisis. Similarly, if a young couple in the NYC suburbs sells their starter house and moves into something bigger now that they have a few children, chances are they are going to need some kind of financing.

I guess my point is (or one of my points is) that these broad statistics, e.g. that 23% of houses are paid for in cash, need more detail.

Boomers might be changing this, but typically I think a great many house purchases come from people just moving to roughly equivalent places for work, better schools, location preference, etc. Locational arbitrage has been a big thing since even before covid -- if your place in the city is worth $1M+, buying an equivalent (or better) place elsewhere for half the money and pocketing the difference gets pretty attractive, and if anything drives up prices in the other places (low demand), while being lost in the noise of the urban real estate markets. (ie. not many people do this relative to the total housing stock in a big city, but it's still enough to distort the much smaller rural markets)

Boomers might be changing this, but typically I think a great many house purchases come from people just moving to roughly equivalent places for work, better schools, location preference, etc

Well if those people are paying cash, they are dependent on finding buyers to supply that cash, right?

Sure -- those could be other people doing the same thing, or people already in the market trading up and taking on a manageable mortgage.

Sure -- those could be other people doing the same thing, or people already in the market trading up and taking on a manageable mortgage.

Which means that it's difficult to say what the influence of these cash buyers is on affordability.

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