Florida had the highest share of all-cash home sales at 50.9 percent in June.
Chicago, IL (PRWEB) September 12, 2014
The Federal Savings Bank shares two recent releases highlighting the data showing all-cash sales declined in June.
The Federal Savings Bank was intrigued by a recent September 9th report from Corelogic has revealed a decline in all-cash home sales, giving mortgage-dependent home buyers more footing in the housing market.
In June, 33 percent of home sales were made with cash, according to recent data from CoreLogic. June's rate of cash sales was down from 34.4 percent in May and 36.6 percent in June 2013. The decline marked a six-year low, and the last time cash sales were at this rate was 2008, which is seen as the unofficial start of the housing downturn. Since the U.S. real estate market has been improving, the presence of cash transactions has been decreasing, with CoreLogic noting there have been year-over-year drops each month since January 2013.
All-cash sales hit a peak in 2011, when they accounted for 46.2 percent of total sales. Prior to the downturn, these type of transactions averaged 25 percent.
The Federal Savings Bank found the CoreLogic in alignment with another recent report from RealtyTrac, which revealed a decline in all-cash and investor home sales in the second quarter of 2014.
New York has one of the highest cash sale rates
CoreLogic also broke the data down by states, noting Florida had the highest share of all-cash home sales at 50.9 percent in June. The Sunshine State was followed by Alabama (48.1 percent), New York (44.6 percent), Kentucky (40.1 percent) and Nevada (40 percent).
The high rate of all-cash transactions has been a notable trend in New York, particularly in New York City's Manhattan area. Citing data from real estate expert Jonathan Miller, DNAInfo reported nearly 60 percent of condo and 30 percent of co-op purchases in the first quarter of 2014 were made with cash. Many of these home buyers are happy to avoid the steps required for buying a house with a mortgage and present stiff competition for first-time buyers who typically require financing.
Average down payments increased in Q2 2014
Despite the declining presence of cash sales, buyers are still doing what they can to remain competitive in the housing market. A recent report from LendingTree revealed the average down payment for a conventional loan granted to the marketplace's customers was 17.28 percent of the loan amount in the second quarter of 2014. This was an increase from 15.78 percent the previous quarter.
Doug Lebda, founder and CEO of LendingTree, said the rise in average down payment percentages could be the result of buyers offering more to appear more attractive to sellers.
"We've seen an overall downward trend in down payments over the past 18 months, but appreciating home prices and pent-up demand has brought borrowers back into the housing market with more funds available for a down payment," Lebda said. "Additionally, in certain markets, a competitive real estate environment may be forcing some homebuyers to put more money down in order to strengthen their offers."
Contact the Federal Savings Bank, a veteran owned bank, for more information about preapprovals for low-cost financing, a viable tool for staying competitive in the housing market.