NAF Cash, a subsidiary of multichannel mortgage lender New American Funding (NAF), announced on Tuesday the availability of a tool called NAF Cash Maps that aims to offer data on trends related to all-cash home purchases.
“The data is derived from information collected by real estate data provider MMI, MLS data, and public records, enhanced with NAF Cash data engineers’ detailed work and analysis,” the company explained. “This new tool provides homebuyers with insight into the prevalence of cash buying in each state, empowering them to make more informed decisions about how to compete in today’s housing market.”
The map is designed to give prospective homebuyers more information about whether or not cash purchases are more or less common in a given area, so they can then make a financing decision based on the competitiveness of cash offers, according to Miguel Villegas, director of NAF Cash.
Through NAF Cash, the lender purchases the buyer’s chosen home upfront with cash. The buyer then rents the new home while working on selling their old home or securing financing for the new one. When the buyer is ready to move in with permanent financing, NAF sells it back to the buyer for the original price, plus a convenience fee that can be added to the purchase price.
The announcement of the new map tool was accompanied by data showing the states with the highest prevalence of all-cash transactions.
“For the first quarter of this year, Mississippi ranked first in the nation in popularity of all-cash homebuying, as more than half of the homes bought in the Magnolia State (56%) were bought with cash,” the company said.
Other states ranking high on the list include Louisiana (53%), Michigan (51%), Georgia (47%) and New York (44%). While Georgia did not crack the top five in 2023, NAF noted that it reported the largest year-over-year increase (19%) of any state in terms of cash-transaction share.
“In some of these states, lower home prices are attracting investors and home flippers, while other homebuyers are looking to downsize or settle into retirement,“ the company explained. “Additionally, there has been a trend in recent years of people with larger homebuying budgets moving away from higher-cost areas into those where homes are less expensive, allowing them to get more home for their money.”