What if your next home didn’t come with a mortgage payment?
It sounds unrealistic at first. But for many homeowners, it’s already happening.
According to the National Association of Realtors (NAR), nearly 3 out of 10 homes today are purchased with cash. That’s a big jump compared to pre-pandemic levels (see graph below):
So how are buyers pulling that off?
It comes down to home equity.
During 2020 and 2021, mortgage rates dropped and housing inventory tightened at the same time. That pushed home prices up quickly.
If you owned a home during that period, there’s a good chance your property gained significant value. In some cases, enough to cover a large portion of your next purchase or even eliminate the need for a loan entirely.
NAR explains:
“. . . rising home equity has armed many existing homeowners with the financial leverage to make cash offers, allowing them to convert years of price appreciation into immediate purchasing power.”
Here’s why that matters if you’re thinking about making a move.
1. Your Offer Carries More Weight
Sellers want certainty.
When financing is involved, there’s always a risk the deal could fall apart. Cash removes that concern.
As Rocket Mortgage explains:
“Cash offers are attractive to sellers. Sellers often prefer to work with cash buyers if they can because they don’t have to worry about a buyer’s financing falling through at the last minute.”
In a competitive market, that can give you a clear advantage.
2. You Can Close Faster
Without a lender involved, the process is simpler.
No underwriting.
No loan approvals.
No waiting on financing timelines.
No loan approvals.
No waiting on financing timelines.
That can cut your closing time down significantly.
Cotality puts it this way:
“Cash buyers have always enjoyed an edge over borrowers. They remove financing risk, reduce delays, and often close in days rather than weeks.”
If the seller needs to move quickly, that speed can make your offer stand out.
3. No Monthly Mortgage
Buying in cash means you own the home outright from day one.
No mortgage.
No monthly payment.
No exposure to interest rate changes.
No monthly payment.
No exposure to interest rate changes.
That shift can open up flexibility in your finances.
As Zillow explains:
“Paying in cash means you own your home outright. This eliminates the need for monthly mortgage payments, freeing up your finances for other priorities like savings, travel, or home improvements.”
4. You May Pay Less Overall
This is something a lot of people don’t expect. Cash buyers often pay less.
According to Cotality, buyers who pay in cash tend to spend about 9% less than those using financing. That’s because sellers may accept a lower price in exchange for a faster, more reliable closing.
As Cotality explains:
“From a seller’s point of view, a lower but reliable offer can feel preferable to a higher one that may collapse weeks later.”
And that gap has been widening over time (see graph below):
Is Buying in Cash Realistic for You?
Not every homeowner will buy their next house outright in cash. And that’s okay.
But the bigger takeaway is this: the equity you’ve built may give you more options than you think.
Whether that means downsizing and eliminating a mortgage entirely, or just relocating with stronger negotiating power, your current house may be what makes it possible.
Bottom Line
Before assuming you’ll need another mortgage, take a closer look at your equity.
It could change what’s possible.
If you’re curious what your home is worth or how much buying power you really have, let’s run the numbers and map out your next move.
The information and opinions in this article are not investment advice. Tim Stice makes no guarantees about accuracy or completeness. Always do your own research and consult a professional before making financial decisions. Tim Stice is not liable for any loss or damage resulting from reliance on this content.
Tim Stice, Broker Realtor | Hawaii Life | Maui, Hawaii | Real Estate Agent
The information and opinions in this article are not investment advice. Tim Stice makes no guarantees about accuracy or completeness. Always do your own research and consult a professional before making financial decisions. Tim Stice is not liable for any loss or damage resulting from reliance on this content.
Tim Stice, Broker Realtor | Hawaii Life | Maui, Hawaii | Real Estate Agent
