Why don't more Americans pay for their home in cash instead of mortgage?

According to the Pew Research Center back in August of 2019, only one-third of American adults invest in the stock market and usually higher income bracket adults. And with the pandemic and other unforeseen catastrophes I wonder why not just wait it out until you can afford a home outright instead of putting down a mortgage if the average American doesn't generally invest their money elsewhere.

33 Answers

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  • 1 month ago

    Like only 10% of home buyers actually have the full amount in savings.

  • drip
    Lv 7
    1 month ago

    It would take years for most people to save up for a home. If they ever could afford a home.

    By me, for a small (1200-1500 square foot). townhouse you will be spending about $180,000+ USD.   A three bedroom 2.5 bath home would over $300,000. 

    Where my daughter lives a 900-1000 square foot townhouse starts at $550,000.   Most single family homes, 3 bedrooms 2 bath home can be $800,000 to over a million.  

    People are not going to have  that kind of cash on hand.  Even couples making over six figures a year are not going to be able save that much cash. They are still paying rent if they don’t own. 

    Having a mortgage builds your credit. 

  • garry
    Lv 6
    1 month ago

    maybe they havent saved up enough cash for it , unless you have a spare million floating around .. some readers never learn , till they know what the meaning of money is .

  • 1 month ago

    Most Americans don't have nearly that much cash on hand. Not even with investments. Also, paying a mortgage builds credit, you can deduct the interest on your taxes and they don't stay in a home long enough anymore. 

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  • 1 month ago

    Credit ratings.   Proof of payment. 

  • L
    Lv 5
    1 month ago

    Because most people do NOT have a lot of cash laying around for this.  Besides, paying a mortgage increases their credit score.

  • 1 month ago

    In 2016 I bought a house with 4% down and borrowed the rest on a 30 year mortgage. The monthly payment was about the same as the rent I had been paying for the previous 4 years.

    In 2019 I sold that house and after the title company paid off the mortgage, paid the real estate agents, and paid all the other fees associated with the sale they deposited the remaining $95,000 into my bank account.

    I'm very glad that I didn't "wait it out" by paying rent for an additional 3 years.

    home purchases are one of the few situations where the average middle class citizen is better off borrowing money to buy sooner instead of waiting until they can pay cash.

  • 1 month ago

    Perhaps because most Americans don't HAVE the cash up front (and may never have)

  • 1 month ago

    it might be easier for them to do it that way

  • Anonymous
    1 month ago

    Owning a home is a leveraged investment.

    You have to pay every month anyways....rent or mortgage.   With a mortgage, you can invest 20% of the value of the investment while you get appreciation on 100% of the value of the asset.

    I would NEVER pay cash for a home when I can get a 2.75% mortgage and invest cash elsewhere and get 3-4 times that in returns.   Only idiots do that.

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