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Cash Share of Home Sales Falls Year-Over-Year for 21st Consecutive Month

Dec 10, 2014

Cash sales made up 34.8 percent of total home sales in September 2014, down from 37.2 percent in September 2013. The year-over-year share has fallen each month since January 2013, making September the 21st consecutive month of declines. Month over month, the cash sales share ticked up by one percentage point, however, cash sales share comparisons should be made on a year-over-year basis due to the seasonal nature of the housing market. 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 46.4 percent of total home sales.

Real estate owned (REO) sales had the largest cash sales share in September 2014 at 58.1 percent, followed by re-sales (34.4 percent), short sales (32.4 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 7.8 percent of total sales in September 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 23.9 percent of total sales.

Delaware had the largest share of any state at 57.4 percent, followed by Florida (50.8 percent), Alabama (49.6 percent), New York (44.4 percent) and Idaho (43.3 percent). Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Miami-Miami Beach-Kendall, Fla. had the highest share of cash salesat 56.2 percent, followed closely by West Palm Beach-Boca Raton-Delray Beach, Fla.(55.9 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (54.8 percent), Cape Coral-Fort Myers, Fla. (54.7 percent) and Detroit-Dearborn-Livonia, Mich .(53.1 percent). Washington-Arlington-Alexandria, D.C.-Va.-Md. had the lowest cash sales share at 16.2 percent.

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