It’s been a wet spring. In addition to the rainfall, the Fed has been trying to throw a little water on inflation. As such, we’ve seen a large uptick in mortgage rates. As I write this, rates are hovering around 6%. This is up from average rates around or even below 3% for much of 2021. Bozeman has always seen a decent percentage of cash purchases, so how has that trend fared in 2022?

The percentage of cash transactions continues to increase in Bozeman. Looking at cash-only transactions for sales of single-family homes in all of Bozeman between January 1st and June 1st, back in 2019 the percentage was around 25.7%, or 88 out of the 343 sales. In 2020, it dipped a bit to just shy of 20%, or 62 of 311 sales. Last year it was up significantly, with 103 of 341, or just over 30% of sales. This year, cash purchases continued to increase, as 105 of 268 sales, or 39%, were cash transactions.

In the past, even though the percentage moved slightly up or down over the years, it was generally fairly consistent. In 2015, 85 of the 371 sales during the first five months were cash, or 22.9%. In 2014, it was 70 of 318 sales, or 22%, and in 2013, 61 of the 276 sales, or 22.1% were cash purchases.

The area around downtown often has an even higher percentage of cash transactions, and that trend continued this year. Looking at the time period of January 1st through June 1st, in 2019, 18 of the 56 homes sold were purchased with cash, roughly 32%. In 2020, that number was up to 39%, or 20 of 51 homes sold. It rose again in 2021 to 22 of 50 homes, or 44%. This year, the percentage ticked up again to 45%, or 19 of 42 downtown single-family home sales being all cash purchases.

Drilling down a little deeper and looking at condos downtown, in 2018, 16 out of 33 sales, or 48% were cash purchases. In 2019, 12 out of 33, or 36% were cash purchases. In 2020 it rose slightly to 37.5%, or nine of the 24 condos. Last year, it was actually down slightly, with 33%, or 10 of the 30 condos sales. This year, it rose again to 44%, or 17 of the 39 downtown condo sales in the first five months being cash purchases.

This data is really too early to show what the effects of the mortgage rate increases are or will be. However, it is interesting to see that while the overall number of sales has decreased, partly due to a decrease in available inventory, cash purchases have continued to increase, both in total overall numbers, as well as in the percentage of sales.

As usual, I have included data for the number of single-family homes sold during the first five months of 2022. In addition to the 268 single-family homes sold during this time period, another 116 home sales are currently pending as of the date of writing. This compares to 156 home sales pending at this time last year.

The included data reflects sales of homes in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and within Bozeman city limits. The data includes home sales reported through the local Big Sky Country MLS, and does not include private party sales, Condominiums, or Townhouses.