As labor continued its shift to remote work and property prices crashed in the covid bust, wealthy investors in 2022 were the most active buyers of commercial property and they paid cash for almost a third of U.S. homes purchased.

The housing market is in a recession, and all-cash offers continue as a way to sidestep rising interest rates, Washington Post reported.

A housing recession happens when the number of sold properties continues to decline for more than six months, which describes the U.S. housing market since July 2022, according to the National Association of Realtors.

The U.S. is short 3.8 million homes to meet its housing needs — double the number from 2012 — according to a recent analysis from housing policy group Up For Growth. Surging home prices have exacerbated inequality, with high housing costs shutting out many Black people, people of color, young adults and low-income workers from homeownership, considered a major source of wealth building.

“Clearly, affordability is at a crisis point for millions of Americans across the country,” said Mike Kingsella, CEO of Up For Growth, which focuses on addressing the housing shortage. “Where we are seeing underproduction, we’re seeing homeownership fall further and further out of reach.”

The world’s ultra-rich often try to diversify their wealth through real estate, where sales of commercial mortgage bonds are slumping as rising interest rates cut into lending volumes, Bloomberg reported.

Almost a third of U.S. home sales in 2022 were cash sales, according to real estate company Redfin. That’s an 8 percent increase from 2021 and a return to levels last seen in 2014, when the housing market was recovering from foreclosures set off by the subprime mortgage crisis and Great Recession.

The rise of all-cash real estate buys comes at a time when the average home buyer is increasingly likely to be white, wealthy and older and the proportion of first-time buyers is at its lowest in more than 40 years, according to the National Association of Realtors.

“Only the wealthy are essentially buying homes,” said Lawrence Yun, chief economist at National Association of Realtors.

Wealthy people, investors, retirees, foreign buyers, and buyers who sold homes and are flush with cash, are beating would-be homeowners who need to borrow money and take on a mortgage, real estate experts said.

“What we found was those that already were more well-off were able to take advantage of the strong housing market and add to their wealth, while those trying to better their situation were often pushed to the side,” said Ali Wolf, chief economist at Zonda, a housing data and consulting firm.

Wealthy investors and their investment firms are focused on commercial real estate, one of the hardest hit asset classes in the pandemic, according to London-based residential and commercial property consultancy Knight Frank’s 2023 Wealth Report.

Private investors mostly focused on rental housing in the commercial real estate sector in 2022. They allocated the most capital in the U.S., where New York is a hub as well for residential real estate deals of $25 million or more, according to the Knight Frank report.

“Private buyers are taking advantage of the ongoing repricing of assets and stronger currency positions,” said Alex James, Knight Frank’s head of private client advisory, in a statement. “This trend is set to continue with private investors seeking liquid wealth preservation options.”

The trend of paying cash for housing isn’t happening equally across the U.S., Washington Post reported. In the Washington, D.C. area, almost 20 percent of homes bought in 2022 were paid for in cash. Forty miles north in Frederick, Md., that rate was almost 40 percent.

The percentage of homes bought with cash in Naples, Fla., reached a record high of 56 percent. The influx of all-cash deals has displaced longtime locals, according to Southwest Florida real estate agent Ashley Lisea. The increased home property values also raised the cost of living in the area.

“For the past two years we have been in a multiple offer situation,” Lisea said. “People who are middle class don’t have the cash to buy straight out.”