CoreLogic reported a decrease in the share of all-cash home sales in June over the previous year. This accounted for 31.3% of the total sales during the month compared to 33.9% in June 2014 and was down 0.7% point from May.
It’s important to note also that CoreLogic says the share of cash sales has fallen each month since January 2013 -- signalling a much anticipated change in market trends. Up to this point cash purchases were most common for real estate owned (REO) properties at 57% of the total and were the only category in where cash sales increased year-over-year. The sales of existing homes had a 30.8% cash share followed by short sales at 28.7%. Only 15.6% of newly constructed homes were sold for cash.
What does this mean for a buyer who needs a mortgage? It could mean a lot of things, not the least of which is less of a battle for inventory that does exist. It’s important to remember, especially in California, the influx of all-cash buyers has been steady, making it harder to purchase. There’s hope that this talking point will give more buyers who are looking to get a mortgage a fighting chance at achieving their dream of owning a home.
As Inventory Slides, Are Pending Home Sales to Blame?
The volume of pending home sales dropped a bit. Summer cooled off after strong numbers in May and June whereas July numbers, while slightly smaller, remained in relatively positive territory.
In August however, the National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings for home purchases, was down 1.4 percent from the previous month. Analysts had expected that the index would hold at July's half percentage point gain. NAR stands to believe that August sales represent a healthy level of activity, continuing what is now a 12-month streak of consecutive year-over-year gains.