In the elevated mortgage rate environment, cash sales continued to play an outsized role in sales activity. The market share of cash sales was 62.3% for sales that closed in the quarter, the fourth time in the past five quarters that the market share was above the 60% threshold. By price strata, sales under $1 million reflected a 52% cash share, while sales above $5 million had a 99.6% share of cash buyers. By units, the number of mortgage sales rose 15.1% annually, exceeding the annual gain in the number of cash sales for the first time in two years, which rose by 10.6%. This first-time shift in the mix of purchase types was likely not aided by the change in mortgage rates, which remained relatively constant during the quarter. The change probably reflected a weakening of buyer resolve after waiting for two and a half years for rates to fall. Seller resolve also weakened with the increase in listing inventory after two years of the “lock-in effect” caused by the steep ascent of mortgage rates since early 2022.
