During the month of April, about one of three home purchases was paid for in cash, as outlined by CoreLogic. Although that seems like a steep percentage, it’s actually lower than the prior year. During April 2015, 34.4% of homes sold were cash sales. This year, however, that number dropped down to 31.6%, even declining 1.6% points from the month before. Cash sales made up 33.9% of purchases from January to April this current year.
Prior to the housing crisis, typically 25 % of home sales were cash sales, CoreLogic says. The research firm forecasts that if cash sales continue to decline at the current rate, they will be back to pre-crisis numbers in 2018.
Cash sales peaked at the beginning of 2011, when 46.6% of sales were cash transactions
Of the four different types of sales (REO, resale, short sale, new construction) CoreLogic examined in their April report, REO sales had the highest number of cash sales, at a 56.7% share. Out of all the resales in April, 31.3% were cash sales, and 28.6% of short sales were cash transactions. Historically, resales take the lion’s share of home sales (83% in April), and therefor provide the biggest influence on cash sale data, reported by CoreLogic.
Cash sales by market
In Miami-Miami Beach-Kendall, where cash sale transactions have been under a microscope since new regulations enacted in March, cash sales dropped 7.76% year-over-year, down to 49.6 %.
The New York-Jersey City-White Plains market didn’t see a distinguishable reduction in cash sales share, dropping only 0.01% from the previous year and holding steady at 46.3 %.
The cash sales share in April for Baltimore-Towson-Columbia dropped down to 27% – a 1.65 % decline from the year before. Washington D.C.’s cash sales only held a 15.5 % share of the total sales, which happens to be 0.77% less than April 2015.
The San Francisco metro area experienced 25.6 % of home sales as cash transactions. A year ago, this number was only a few basis points higher, at 26 %. In Los Angeles, cash sales totaled 22.1 % of total sales – a 1.37% decline from the year prior.
Houston saw a substantial decline in cash sales from year-over-year, totaling 29% in April 2016, down 4.8% from 2015..
Chicago’s cash sales also inched nearer to the aforementioned “normal” national average of 25 percent. The total cash sales in the Chicago metro area was 29.7 percent this year, a 4.6% year-over-year.
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