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Cash Sales Share Falls 3 Percentage Points From a Year Ago

Cash Sales Accounted for 32 Percent of All Home Sales in September 2015

Molly Boesel    |    Market Trends

Cash sales accounted for 32.5[1] percent of total home sales in September 2015, down 3.4 percentage points from 35.9 percent in September 2014. On a month-over-month basis, the cash sales share increased by 0.2 percentage points in September 2015 compared with August 2015. The cash sales share typically increases month over month in September, and due to seasonality in the housing market, cash sales share comparisons should be made primarily on a year-over-year basis.

The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. 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 September 2015, the share should hit 25 percent by mid-2017.

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 September 2015 at 58.3 percent. Resales had the next highest cash sales share at 32 percent, followed by short sales at 29.1 percent and newly constructed homes at 15.9 percent. While the percentage of REO sales that were all-cash transactions remained high, REO transactions accounted for only 6.4 percent of all sales in September 2015. 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 (about 81 percent in September 2015), and therefore have the biggest impact on the total cash sales share.

Figure 2 shows the cash sales share by state[2] for September 2015. Alabama had the largest share of any state at 48.2 percent, followed by West Virginia (46 percent), Florida (45.2 percent), New York (44.1 percent) and Kentucky (39.6 percent). Of the nation’s largest 100 Core Based Statistical Areas (CBSAs)[3] measured by population, Miami-Miami Beach-Kendall, Fla. had the highest cash sales share at 50.8 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (50.6 percent), Philadelphia, Pa. (48.9 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (47.9 percent) and North Port-Sarasota-Bradenton, Fla. (47.2 percent). Syracuse, N.Y.had the lowest cash sales share at 14.1 percent.

[1] Rounded up from 32.45.
[2] Adequate data was not available for South Dakota and Vermont, and as such, cash sales shares are not reported for these states.
[3] The cash sales share for CBSAs listed in this report was calculated using cumulative sales from the past three months.

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