A combination of high mortgage rates and high prices are discouraging first-time buyers and making cash purchases for affluent buyers a more attractive option

The share of all-cash home purchases is on the rise and reached its highest level in nearly a decade. Just over one-third of home purchases in September were made in cash, up from 29.5% a year earlier, according to a new report from Redfin.

All-cash purchases are being supported by elevated mortgage rates in the current housing market. With rates hovering around 7.5%, purchasing a home in cash and avoiding interest altogether is an attractive option for those with the sufficient funds. Additionally, affluent Americans who can afford to pay cash are more apt to buy homes in more expensive housing markets, while other would-be buyers are sidelined due to high home prices and mortgage rates.