4 ms·

I would be willing to bet special financing is distorting the numbers. There are companies that front borrowers cash to help them compete with real cash buyers

• bombcar 4y ago
  This is part of it. Contingent offers are always less desirable than non-contingent so you make a cash offer if you can even if you immediately refinance.
• jjeaff 4y ago
  I don't think that's a very large market as of yet. But I could be wrong. Hedge funds and other corporate entities are buying up single family homes now. That seems more likely to be pushing more of the trend.
• olliej 4y ago
  For it to make up a third I’m guessing corporate/private equity purchases in which case I _think_ it is considered good practice to use borrowed money to finance asset purchases if the cost to borrow is lower than the expected return. But plenty of these corps have the cash - depending on where you’re buying houses can be cheap (I had a friend going to uni in Merced, ca and many of the houses there had a list price that was less than just the down payment on my home in oakland). But from a business point of view the average capital gain+rent would probably be above interest on the loan to support it.