Cash Home Sales Continues Downward Trend in U.S.

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Cash Sales Accounted for 35 Percent of All Home Sales in January 2016

According to CoreLogic, cash sales accounted for 35.5 percent of total U.S. home sales in January 2016, down 4.2 percentage points year over year from 39.7 percent in January 2015. On a month-over-month basis, the cash sales share increased by 1.9 percentage points in January 2016 compared with December 2015. The month-over-month increase was typical for the month of January.

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 January 2016, the share should hit 25 percent by mid-2017.

Real estate-owned (REO) sales had the largest cash sales share in January 2016 at 59.8 percent. Resales had the next highest cash sales share at 35 percent, followed by short sales at 31.7 percent and newly constructed homes at 17 percent. While the percentage of REO sales that were all-cash transactions remained high, REO transactions accounted for only 7.8 percent of all sales in January 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 (about 79 percent in January 2016), and therefore have the biggest impact on the total cash sales share.
Alabama had the largest cash sales share of any state at 53.1 percent, followed by Florida (49.1 percent), New York (47.4 percent), Mississippi (45.8 percent) and West Virginia (45.8 percent).

Of the nation's largest 100 Core Based Statistical Areas (CBSAs) measured by population, Detroit, Mich. had the highest cash sales share at 65.6 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (54.3 percent), Miami-Miami Beach-Kendall, Fla. (53.4 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (51.5 percent) and Cape Coral-Fort Myers, Fla. (51.1 percent). Syracuse, N.Y. had the lowest cash sales share at 11.6 percent.