NEW YORK ( TheStreet) -- The share of cash sales in overall home purchases rose in July, as rising interest rates and bidding-wars in some cities forced out buyers who need financing. According to a report from RealtyTrac, all-cash sales jumped to 40% of all sales of residential property in July, up from 35% in June. Cash sales accounted for only 31% of sales a year earlier. Dallas, St.Louis, Los Angeles, Riverside-San Bernadino, Seattle and Phoenix were the cities that saw the biggest jump in cash purchases. An unusually low level of inventory in many markets, particularly in the Southwest, has triggered bidding wars among buyers. Those who can pay cash often win the deal over someone who needs to secure financing because sellers like to be certain that they can close the deal quickly and successfully. Traditional homebuyers with a mortgage are increasingly showing signs of fatigue from competing for a limited inventory of homes. According to the report, total U.S. residential properties sold at an estimated annualized pace of 5.5 million in July, up 4% from June and 11% from a year earlier. But eight states posted annual decreases in sales, including California (down 17%), Arizona (down 11%), Nevada (down 7%) and Georgia (down 2%), as listings declined. These four states also saw the biggest increases in median prices of homes, ranging from 20% in Georgia to 31% in California, suggesting demand for homes in these states remain high. "Home prices are accelerating rapidly in these markets thanks to the combination of low supply and strong demand," said Daren Blomquist, vice president of RealtyTrac. "However, counter to the national trend, sales volume in these markets is down even as the percentage of cash sales rises, indicating there is still strong demand but that buyers who need financing to purchase are increasingly left out in the cold. The recent uptick in interest rates could also be contributing to a higher percentage of cash purchases as some non-cash buyers can no longer afford to buy, particularly in high-priced markets," he said. However, it does not appear that institutional investor activity is necessarily on the rise. Investors such as Blackstone ( BX) and Colony Capital ( CLNY) have been massive investors in real estate over the past couple of years, but they still seem to account for only a modest share of purchases at 9% in July. That is unchanged from the previous month and is also the same percentage as in July 2012.