All-Cash Home Purchases: Looking Behind the Numbers

All-cash home purchases are growing significantly in the real estate market – thanks to tighter bank lending practices, repeat buyers who are opting to forgo the mortgage process, and investors gobbling up distressed real estate.

For every month so far in 2010, all-cash buyers comprised either 26 percent or 27 percent of home purchasers, according to the Realtors Confidence Index from the National Association of Realtors. That's nearly double the cash buyers (15 percent) from a year ago, and about three times higher than previous years, when all-cash buyers ranged from just 7 percent to 9 percent of the market.

With a glut of foreclosures and short sales hitting the real estate market, one might be tempted to think that those paying cash for homes are mainly real estate investors.

But digging beneath NAR's numbers tells a different story – and so do Realtors.