How can existing home sales rising today be justified by buyers rushed to buy homes and lock in interest rates before rates move up further when the WSJ reported last week that more than 50% of the homes in the US were bought with cash? "Report: Half of All Homes Are Being Purchased With Cash" By Nick Timiraos
http://blogs.wsj.com/develo...

That's a good question.

NAR has recorded a much lower share of cash sales than Goldman Sachs. Today, it found that all-cash sales comprised 31 percent of transactions in July, the same as last month. The reason for the discrepancy isn't immediately clear to me. (Perhaps it's because NAR does not factor in new home sales, and GS does?)

Either way, NAR's 31 percent finding is up from 27 percent a year before. That alone, I guess, supports what I believe you are implying: that increasing cash-sales are primarily responsible for fueling overall growth in sales, not mortgage-financed sales -- which are the sales that would increase if sideline buyers jumped into the market due to rising interest rates.

In the Charleston SC real estate market homes are flying off the shelves and rising interest rates don't appear to be having any effect. Buyers need to understand that these historically low rates of the last couple years were artificially had and that even though rates have gone up it's still better to own then rent. Mortgage financing is still really really attractive and waiting could only make buyers ability to purchase worse.

It appears that the rush to best interest rate hikes explains only part of the story. In my market, Southwest Michigan vacation homes within 2 hours of Chicago, cash buyers are picking off the very best values while prices continue to rise.