Increase Seen in All Cash Home Sales

Laura Kusisto and Christina Rexrode reported yesterday at The Wall Street Journal Online that, “Five years after the housing market hit rock bottom, mortgage credit is finally returning to the healthy levels of the early 2000s, before the boom-bust cycle began. But all-cash deals remain well above normal levels, even as prices in many markets have pushed to record highs.

“In all, 28.8% of U.S. home sales this year have been all-cash transactions, according to Attom Data Solutions, a data provider. That was down from the peak of more than 40% in 2011 and 2012, when investors were buying homes at a furious pace to turn into rentals. But the percentage of cash deals stands much higher than the 20% or so common in the early 2000s, and it has edged up from 28.6% last year, according to Attom.”

“Want That House? You’d Better Pay in Cash,” by Laura Kusisto and Christina Rexrode. The Wall Street Journal Online (December 5, 2017).

The article noted that, “Cash deals are attractive to sellers because they don’t need to wait around for a bank to make a mortgage. Closings are quicker, and risks are lower. Many sellers choose all-cash offers over higher offers that come with a mortgage attached.”

The Journal writers added that, “Cash sales are spreading even to sleepier markets away from the coasts, as middle-class buyers sell homes in San Francisco or Portland and move to cheaper areas. More than 20% of homes under $250,000 in the Boise area sold for cash in October, up from 15% a year ago, according to the Boise Regional Realtors.”

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