Cash sales of homes in the United States falling, latest figures show
Cash sales made up 34.6% of total home sales in the United States in March 2015, down from 39% in the same month in 2014, according to the latest data available.
The year on year share has fallen each month since January 2013, making March 2015 the 27th consecutive month of declines, the report from real estate form CoreLogic shows.
Month on month the cash sales share fell by 2.8% compared with February but the firm pointed out that due to seasonality in the housing market, cash sales share comparisons should be made on a year on year basis.
The cash sales share peak occurred in January 2011 when cash transactions made up 46.5% of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%.
The report predicts that if the cash sales share continues falling at the same rate it did in March 2015, the share should decrease to 25% by the middle of 2016.
A breakdown of the figures shows that real estate owned (REO) sales had the largest cash sales share in March 2015 at 56.2% followed by resales at 34.5%, while short sales accounted for 31.6% and newly constructed homes 14.9.
While the percentage of REO sales that were all-cash transactions remained high, REO transactions made up only 8.4% of all sales in March. In January 2011, when the cash sales share was at its peak, REO sales made up 23.9% of total home sales. Resales make up the majority of home sales at about 80% and therefore have the biggest impact on the total cash sales share.
Florida had the largest share of all cash sales at 51.8 followed by Alabama at 50%, New York at 46.5%, New Mexico at 42.2% and Michigan at 41.3%.
Of the nation’s largest 100 Core Based Statistical Areas (CBSAs) measured by population, Philadelphia had the highest share of cash sales at 60.7% followed by West Palm Beach-Boca Raton-Delray Beach, Florida at 59.9%, North Port-Sarasota-Bradenton, Florida at 59.5%, Cape Coral-Fort Myers, Florida at 59.3% and Miami-Miami Beach-Kendall, Florida at 58.3%.
The data also shows that Colorado Springs had the lowest cash sales share at 16.1%.