Rising mortgage interest rates and tight credit conditions pushed the cash buyer share of existing home sales to a six-year high in March. But while the cash buyer share and house price growth are loosely correlated, we don’t think such buyers will be enough to keep house prices booming. Rising rates still increase the opportunity cost of tying up cash in a home, and cash buyers can’t use leverage to boost their purchasing power. Accordingly, while cash buyers will provide some support home sales, we still expect house price growth to slow to 6% by the end of 2022.
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