Cash Sales Share Below 30 Percent is First Since 2007
Cash sales accounted for 29.3 percent of total home sales in June 2016, down 2.5 percentage points year over year from June 2015. On a month-over-month basis, the cash sales share fell by 0.9 percentage points in June 2016 compared with May 2016. The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. June 2016 marks the first time the cash sales share has been below 30 percent since late 2007. 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 June 2016, the share should hit 25 percent by mid-2018.
Figure 1 shows the historical trend in cash sales share by sale type. Real estate-owned (REO) sales had the largest cash sales share in June 2016 at 56.2 percent. Resales had the next highest cash sales share at 28.9 percent, followed by short sales at 27.7 percent and newly constructed homes at 15.2 percent. While the percentage of REO sales within the all-cash category remained high, REO transactions accounted for only 4.9 percent of all home sales in June 2016. In January 2011 when the cash sales share was at its peak, REO sales represented 23.9 percent of total home sales. Resales typically make up the majority of home sales, totaling about 84 percent in June 2016, and therefore have the biggest impact on the total cash sales share.
Figure 2 shows the cash sales share by state[1] for June 2016. New York had the largest cash sales share of any state at 45.3 percent, followed by Alabama (44.6 percent), Florida (40.6 percent), Oklahoma (38.6 percent) and Indiana (35.7 percent). Of the nation’s largest 100 Core Based Statistical Areas (CBSAs)[2] measured by population, Detroit-Dearborn-Livonia, Mich. had the highest cash sales share at 56.5 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (49.3 percent), Miami -Miami Beach-Kendall, Fla. (47.9 percent), North Port-Sarasota-Bradenton, Fla. (47.7 percent) and Cape Coral-Fort Myers, Fla. (46.1 percent). Syracuse, N.Y. had the lowest cash sales share at 12.6 percent.
1 Adequate data was not available for South Dakota, Vermont and West Virginia, and as such, cash sales shares are not reported for these states.
2 The cash sales share for CBSAs listed in this report was calculated using cumulative sales from the past three months.
© 2016 CoreLogic, Inc. All rights reserved.
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