Cash Sales Soar to Post-Recession High
Cash sales accounted for 8 percent of new-home sales in the fourth quarter of 2017, matching a high that has not been seen since 2014, the National Association of Home Builders reports on its Eye on Housing blog. Cash sales make up an even larger share of existing-home sales—about 20 percent in December, according to the National Association of REALTORS®.
Cash hardly makes up the bulk of financing options for buyers, however. The share of new homes financed with conventional mortgages has dropped slightly from 73.2 percent to 72.7 percent. In the fourth quarter of 2017, 12.9 percent of new-home buyers used FHA loans. The share of sales financed with FHA-backed mortgages has dropped 4 percentage points since reaching a peak in the second quarter of 2015.
“Different sources of financing serve distinct market segments, which is revealed in part by the median new-home price associated with each,” the NAHB reports. “In the second quarter, the national median sales price of a new home was $321,100. Split by types of financing, the median prices of new homes financed with conventional loans, FHA loans, VA loans, and cash were $347,800, $233,900, $294,400, and $349,300, respectively.”
Source: “Cash Sales Tie Post-Recession High,” National Association of Home Builders’ Eye on Housing blog (Jan. 26, 2018)