Why are more homes being bought for cash in 2023?

by archynewsy
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In Spain, as surprising as it may seem, More homes are bought in cash than with a mortgage. This is reflected in the data from the General Council of Notaries: so far this year, 56.31% of houses and apartments have been acquired at random, a percentage significantly higher than in 2022 (51.20%), 2021 (49.74%) or 2020 (49.05%).

In view of this circumstance, it is inevitable to ask why the purchase of homes for cash has grown so far in 2023. According to the financial comparator HelpMyCash.com, the most likely causes are the increase in mortgage pricesthe higher level of family savings and the increase in foreign buyers regarding the nationals.

The comparator analysts, however, clarify that signing mortgage loansdespite having been reduced due to the rise in interest, still remains at pre-pandemic levels. And remember that the best mortgages on the market They still have competitive fixed, variable and mixed interest rates.

When analyzing the most recent data on cash purchases, it is important to keep in mind that, historically, it has been common in Spain for more homes to be purchased by hand than with a mortgage. In fact, according to the General Council of Notaries, Sales financed with a mortgage loan have only been the majority in two of the last ten years: in 2020 (50.95%) and in 2021 (50.26%).

It is true, however, that cash home purchases have grown significantly so far this year. According to the comparator HelpMyCash, one of the reasons explaining this increase may be the increase in the cost of mortgages. Banks have increased the interest on their mortgage loans between 2022 and 2023which may have led more people to pay for their new house or apartment outright so as not to have to bear a higher additional cost for financing.

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