The percentage of homes purchased with cash nearly doubled between 2006 and 2011, even as mortgage rates fell into free-fall, research firm ""Hanley Wood Market Intelligence"":http://www.hwmarketintelligence.com/v4/default.asp reported.[IMAGE] [COLUMN_BREAK]
Analysts Jonathan Dienhart and Ken Lee revealed that between 2006 and 2011, the share of homes purchased with cash jumped from 22 percent to 40 percent. The upward trend finally stalled in 2012 with a drop back to 38 percent.
Dienhart and Lee gathered their data through Hanley Wood's Housing IntelligencePro and delivered their analysis through a blog post.
The analysts said the reversal comes from non-investor homebuyers returning to the market. With lending standards loosening up a bit, mortgage rates hitting lows never seen before, and rising home prices giving some life to formerly underwater homeowners, the number of homebuyers getting a mortgage increased 9 percent in the first half of 2012, while cash buying stayed flat.
Dienhart and Lee expect that if the market can continue on its slow but steady path of recovery, the trend of more traditional homebuyers returning should continue.