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Cash Sales Account for Nearly 35 Percent of May Home Purchases

NationalMortgageProfessional.com
Aug 14, 2014

Cash sales comprised 34.4 percent of total home sales in May 2014, according to CoreLogic, the lowest share since May 2010, and down from 37.4 percent from the same month a year ago. While the cash sales share also fell from the 36.9 percent reported in April 2014, cash sales share comparisons should be made on a year-over-year basis due to the seasonal nature of the housing market. The share has fallen on a year-over-year basis each month since January 2013. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. The peak occurred in January 2011, when cash transactions made up 46.2 percent of total home sales. Figure 1 shows the historical trend in the cash sales share by sale type. Real estate owned (REO) sales had the largest cash sales share in May at 55.5 percent, followed by re-sales (34 percent), short sales (32.8 percent) and newly constructed homes (16.8 percent). While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 8.2 percent of total sales in May and therefore did not have a large influence on the overall cash sales share. In January 2011, when the cash sales share was at its peak, REO sales made up 24 percent of total sales. Figure 2 shows the cash sales share by state for May 2014. Florida had the largest share of any state at 53.4 percent, followed by New York (50.3 percent), Alabama (48.9 percent), West Virginia (48.3 percent) and South Dakota (46.3 percent). Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Nassau County-Suffolk County, N.Y. had the highest share of cash sales at 66.4 percent, followed by Cape Coral-Fort Myers, Fla. (64 percent), West Palm Beach-Boca Raton-Delray Beach, Fla. (62.8 percent), North Port-Sarasota-Bradenton, Fla. (62.7 percent) and Detroit-Livonia-Dearborn, Mich.(61.1 percent).
Published
Aug 14, 2014
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