Cash is often king. Buyers who can make an all-cash offer on a home can stand out when competition is tight. Cash purchases tend to pose less risk that a deal will fall through from a low appraisal, have fewer financing hang-ups, and tend to make for faster transactions.

All-cash deals comprised 20% of sales over the first two months of this year, up about 5% compared to a year ago, according to a new analysis from realtor.com®. The majority of cash purchases tend to be investors, people looking for second homes, or international purchases. Also, older buyers are more likely to pay cash since they can often use the money from selling their previous residence, according to realtor.com®’s analysis.

“If you have to compete with other potential buyers, an all-cash offer puts you in a more competitive spot,” says Danielle Hale, chief economist at realtor.com®. It “can make you a more attractive buyer.”

Realtor.com® pinpointed the following metro areas with the highest increases in cash sales in January and February of this year compared to a year earlier (pre-pandemic). The following areas had the highest number of cash sales in that period:

1. Reno, Nev.

• Share of cash sales in January and February: 51% (up 29% from a year earlier)

2. Racine, Wis.

• Share of cash sales in January and February: 40% (up from 18%)

3. Greenville, S.C.

• Share of cash sales in January and February: 38% (up from 14%)

4. El Paso, Texas

• Share of cash sales in January and February: 15% (up from 13%)

5. Clarksville, Tenn.

• Share of cash sales in January and February: 30% (up from 12%)

6. Torrington, Conn.

• Share of cash sales in January and February: 41% (up from 11%)

7. Kahului, Hawaii

• Share of cash sales in January and February: 40% (up from 11%

The U.S. housing market is on a hot streak with double-digit annual gains in home prices, bidding wars, and surging buyer demand. That type of soaring housing market is prompting more “bubble” fears in some corners, but economists say the housing market isn’t getting overinflated.

“We have strong conviction that we are not experiencing a bubble in U.S. housing,” Vishwanath Tirupattur, a Morgan Stanley strategist, wrote in a note to clients this week.

Lawrence Yun, chief economist of the National Association of REALTORS®, agrees. He told Axios last month: “This is not a bubble. It is simply lack of supply.”

The rapid rise in prices may be concerning to home shoppers, however. The median selling price for a home is up $35,000 compared to a year ago, which is the fastest-paced increase since 2006, Tirupattur said.

But this isn’t 2006. Housing inventories are low, credit remains tight, and lenders aren’t issuing risky loans at rates like they did back then. Product risk—such as from mortgages with introductory periods, teaser rates, or balloon payments—comprised about 40% of the mortgage market between 2004 to 2006. More recently, those factors are now at only 2% of the mortgage market, according to Morgan Stanley.

Also, the housing market has a record low number of homes available for sale. At the end of March, there were 1.07 million homes available for sale, according to NAR data. For comparison, during the housing bubble, in July 2007, there were more than four times that—4 million homes available for sale.

Still, while home prices won’t keep climbing at the current pace. They aren’t expected to fall either, economists say.

“We are not at all suggesting that home price appreciation will maintain its current torrid pace,” Tirupattur writes. “Home prices will continue to rise, but more gradually.”