The share of cash sales in the housing market have dropped to their lowest point since September 2008. According to the CoreLogic July 2015 MarketPulse report, cash sales made up 33.7 percent of total home sales in April 2015, a decrease from 37.4 percent in April 2014.
Molly Boesel, senior economist at CoreLogic found that cash sales have been on a downward fall every month since January 2013, making April 2015 the 28th consecutive month of declines. Month-over-month, the cash sales share fell 0.9 percentage points. Due to market seasonality, CoreLogic reports that cash sales share comparisons should be made each year.
“The cash sales share peak occurred in January 2011 when cash transactions made up 46.5 percent of total home sales nationally,” Boesel said. “Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. If the cash sales share continues to fall at the same rate it did in April 2015, the share should hit 25 percent by mid-2017.”
According to CoreLogic, real estate-owned (REO) sales had the largest cash sales share in April 2015 at 56.6 percent and was also the only category to see a year-over-year increase in the cash sales share. Following REO, resales had the next largest cash sales share at 30.4 percent and newly built homes had a share of 15.3 percent.
Although REO had the largest percentages of all-cash sales, these transactions only made up 7.4 percent of all sales in April 2015, CoreLogic says. When cash sales were at their peak in January 2011, REO sales made up 23.9 percent of total home sales. Meanwhile, resales had the biggest impact on the total cash sales share with an 81 percent share in April 2015.
Boesel determined that Florida had the largest cash sales share of any other state at 51.4 percent, followed by Alabama (48.5 percent), West Virginia (48.3), New York (45.5 percent), and Kentucky (41.4 percent). Syracuse, New York had the lowest cash sales share at 11 percent.