There is more than one type of housing market today. Different buyers face different challenges depending on their finances, mortgage rates, and goals.
Ryan Serhant, CEO of SERHANT, discussed this shift in a CNBC interview. He described four groups: cash buyers, buyers who need a mortgage, homeowners with low mortgage rates, and builders.
Let’s take a closer look at the first group: cash buyers.
According to the National Association of Realtors (NAR), 27% of existing-home sales in September 2026 were cash transactions. That means more than one in four buyers paid without a mortgage.
With affordability still a challenge for many households, that is a meaningful share of the market. But it does not mean every cash buyer is a wealthy investor.
Some are homeowners who have built up enough equity to buy their next home outright. Others are investors, retirees, or people buying a second home.
Here’s who is paying cash, where these buyers are most common, and what the trend could mean for your next move.
Who Is Paying Cash for Homes?
Cash buyers generally fall into a few groups:
- Homeowners moving to another property: They may use the proceeds from selling their current home to buy their next one.
- Second-home buyers: Some buyers purchase vacation homes or additional properties without financing.
- Real estate investors: Investors may use available funds to purchase properties for rental income or other investment goals.
- Retirees and other financially prepared buyers: Some have savings or other assets that allow them to purchase without a mortgage.
So, cash purchases are not limited to large investment companies. Some buyers may be homeowners who have spent years building equity.
According to Cotality, the average homeowner with a mortgage had about $310,000 in home equity in the second quarter of 2026. This is a national average, not the amount every homeowner can access or use toward another purchase.
For some homeowners, that equity may create more options than they realize. Selling a home can provide funds for the next purchase, including the possibility of buying without a new mortgage.
You can also learn more about using home equity to buy your next home and the factors to consider before making a move.
Why Some Homeowners Can Buy Their Next Home With Cash
Homeowners who have built significant equity may be in a stronger position to move. Their sale proceeds could cover all or much of the cost of their next property.
Buying with cash can offer several advantages:
- No new monthly mortgage payment: A buyer who pays the full purchase price in cash does not have a mortgage payment on that property.
- No need to qualify for a new mortgage: The buyer does not need mortgage approval for the cash purchase.
- Potentially fewer financing-related delays: Without a mortgage, the transaction does not depend on lender underwriting and funding.
- More control over borrowing costs: The buyer does not need to take out a new mortgage at current rates.
However, paying cash does not remove every cost. Buyers still need to plan for closing costs, property taxes, insurance, maintenance, and other expenses.
Using all available cash for a home can also leave less money for emergencies or other financial goals. Buyers should consider their full financial picture before deciding how much equity to put toward another property.
And not everyone needs enough equity to cover the entire purchase. A larger down payment may reduce the amount borrowed and help lower the monthly mortgage payment.
Where Are Cash Buyers Most Common?
Cash purchases vary widely by location. The national percentage does not tell the whole story about an individual city or neighborhood.
Realtor.com’s analysis of sales from January through April 2026 found that cash purchases accounted for about 47.2% of sales in Mississippi and 45.9% in Montana. The report also showed that cash activity varies with home prices, household wealth, retirement patterns, and second-home demand.
These differences matter because local market conditions can affect how buyers compete. A market with more cash purchases may look very different from one where most buyers rely on mortgages.
What Does This Mean for Chicago-Area Buyers?
Cash purchases are also a meaningful part of the Chicago-area market. Realtor.com reported that cash transactions represented 27.2% of sales in the Chicago-Naperville-Elgin metro area from January through April 2026.
That figure is a useful regional reference, but it does not describe every Chicago neighborhood or suburb. The share can differ based on local prices, property types, and the mix of buyers.
For example, a neighborhood with more lower-priced properties or investment activity may attract a different mix of cash buyers than an area with higher-priced homes.
Local conditions matter when you are deciding how to price a home, evaluate an offer, or prepare to buy. An agent familiar with your target area can help you understand the competition and compare your options.
For more local context, read about the role of large investors in the Chicago housing market.
Most Homebuyers Still Use a Mortgage
If you are planning to buy a home with a mortgage, you are not alone.
NAR’s September 2026 data showed that cash sales accounted for 27% of existing-home transactions. That means approximately 73% involved financing or another non-cash arrangement.
Cash purchases also vary by price range. Realtor.com’s analysis found that cash buying was especially common at both ends of the market. More than two-thirds of homes sold for less than $100,000 were purchased with cash during the first four months of 2026. More than 40% of homes priced above $1 million were also bought without financing.
This pattern shows why it is important to understand the market you are shopping in. Cash activity can look very different depending on the property’s price and location.
If you need a mortgage, do not assume you are automatically at a disadvantage. A well-prepared buyer with a clear budget, mortgage pre-approval, and a thoughtful offer can still be competitive.
The best approach is to understand your financial position and the conditions in the areas where you want to buy.
What Cash Buyers Mean for Sellers
Cash offers can appeal to sellers because they remove the need for mortgage approval and lender funding. That can reduce some financing-related risks and may support a smoother closing.
However, a cash offer is not automatically the best offer.
Sellers should compare the full terms of each offer, including:
- The purchase price
- Inspection and other contingencies
- The proposed closing date
- Proof of available funds
- Any other conditions that affect the transaction
A financed offer may still be the stronger choice if it provides a better price or more favorable terms. The right decision depends on the seller’s priorities and the details of each offer.
Key Takeaways
- Cash buyers are a significant part of the market. NAR reported that 27% of existing-home sales in September 2026 were cash transactions.
- Not every cash buyer is an investor. Some are homeowners using the proceeds from a previous sale.
- Home equity may create more choices. Some homeowners can use their equity to reduce borrowing or buy another property without a mortgage.
- Local conditions matter. Cash purchase rates vary by market, price range, and buyer demographics.
- Financed buyers still have opportunities. Preparation, realistic budgeting, and a strong offer can help buyers compete.
- Cash is not the only factor sellers should consider. Price, contingencies, timing, and the buyer’s ability to close all matter.
Frequently Asked Questions
What percentage of homebuyers pay cash?
NAR reported that 27% of existing-home sales in September 2026 were cash transactions. The share can change each month and varies by location and price range.
Are most cash buyers real estate investors?
No. Cash buyers include investors, second-home buyers, retirees, and homeowners using proceeds from a previous sale. The mix varies by market.
Can I buy my next home with the equity from my current home?
Possibly. The amount you can use depends on your sale proceeds, remaining mortgage balance, transaction costs, and the price of the next home. A cash purchase may be possible for some homeowners, while others may need a new mortgage.
Are cash buyers common in the Chicago area?
Yes. Realtor.com reported that cash purchases represented 27.2% of sales in the Chicago-Naperville-Elgin metro area from January through April 2026. Individual neighborhoods and suburbs may have different patterns.
Should sellers always accept a cash offer?
Not necessarily. Sellers should compare the price, contingencies, proof of funds, closing timeline, and other terms. A financed offer may be more attractive when its overall terms are stronger.
Make Your Next Move With a Clear Picture of the Market
Cash buyers are an important part of today’s housing market, but they are not the entire market. Many buyers still use mortgages, and their opportunities depend on their finances and local conditions.
If you already own a home, your equity may give you more choices than you expect. If you are preparing to buy, understanding local competition can help you plan a stronger offer.
The most useful next step is to look at your budget, your goals, and the market where you want to buy or sell. Those details matter more than assumptions about how everyone else is purchasing homes.