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Many wealthy people are buying luxury homes with cash, which is driving up the prices of these expensive properties. In the first three months of this year, the median sale price of luxury homes reached a record high of $1.23 million, up 8.7% from last year.
On the other hand, the prices of non-luxury homes, which are in the middle range of the market, increased by 4.6% to $345,000. This rise in prices is happening because fewer homes are available for sale, and mortgage rates are going up, making it harder for people to afford homes.
While higher mortgage rates are discouraging some people from buying homes, wealthy buyers are still purchasing luxury properties. In fact, sales of luxury homes increased by 2.1% compared to last year, while sales of mid-range homes decreased by 4.2%.
One reason for this is that wealthy buyers can afford to pay for homes in cash, avoiding the need for mortgages. Nearly half of luxury homes were bought with cash in the first three months of this year, the highest percentage in at least ten years.
Despite more luxury homes being on the market, their prices continue to rise. This is in contrast to mid-range homes, where the number of available homes is actually decreasing.
Overall, the trend of wealthy buyers purchasing luxury homes with cash is driving up prices in the high-end housing market.
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