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Key Points
- The American city where home buyers are most likely to pay cash is Naples, Florida.
- This city also ranks high on many lists of best places to live.
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Many Americans take out mortgages to pay for their homes. Generally, this mortgage rate is 6%, about double what it was three years ago. This has helped home prices rise. People with 3% mortgages hold onto their homes because of relatively low monthly payments, lowering the inventory of homes for sale.
Some people get around the mortgage rate problem. In August, about a third of all home sales were cash. Naples, Florida, the major American city where people were most likely to pay cash, had a rate of 60%.
Where Buyers Use Cash
Most of the markets where most people pay cash for homes are in Florida. Among the top five, Naples is followed by Northport (53%), Palm Bay (49%), and Cape Coral (48%). Myrtle Beach, South Carolina, (53%) was the only city in the top five that was not in Florida. The data come from Redfin.
At the far end of the list was San Jose, California, where cash buyers comprised 19% of the market. Notably, San Jose is the most expensive housing market in the United States, with a median price of a house of nearly $1.5 million.
Naples has one significant advantage over many other American cities. It ranks high or at the top of many “best places” to live lists. In a recent U.S. News & World Report list, it ranked number one. “Long known as a preferred retirement spot for the rich, powerful and cold-averse, the greater Naples area supplies pristine beaches, sprawling golf courses, and fine dining and shopping,” the magazine reported.
It is open to debate whether income is related to cash buyers. According to the Census Bureau, Naples residents have a median household income of just over $135,000, compared to the national average of about $80,000.
Boomers Are Flocking to These Islands, and You Can Buy a Home on One for Less Than $30K Upfront
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