Home purchases made with cash have been steadily high in a few select states across the country, but for the most part states are seeing a steady decrease which turns into a national drop. The states that are seeing the high cash purchases are also those that are seeing a high level of foreclosures.
Cash purchases are at the lowest point since 2008 in the states. May of this year saw a 31.9% of homes purchased with cash, but compared to 35.1% in May of last year (2014). The rate is continuously, slowly dropping at a 29 month streak. Month over month cash purchases have fallen 1.7% since January of 2013.
Lender-owned real estate (REO) is a shrinking portion of the overall housing market which was only 6.4% in May. When looking at cash purchased homes, REO takes up the majority of those transactions with 56.1%. When comparing, you see the direct correlation of a decreasing number of REO’s sold and a decreasing percentage of total homes purchased with cash.
The state with one of the largest cash transaction share is Florida at 47.8%, but they also remains at the top of the list with the most properties in foreclosure. If cash purchases continue to drop, we’ll see a return to the pre-housing crisis level by 2017.