2017 was previously thought to be the year that cash sales in the U.S. would return to pre-crises levels, however four consecutive months of increases have proven that logic wrong. According to CoreLogic's report for cash sales for October (the most recent data available), the number of homes purchased without financing climbed a tenth of a percent.
Before the housing crisis, cash sales accounted for approximately 25 percent of total home sales, a target that experts believe to be 'normal'. October's figure was 31.8 percent, down 2.7 percent from the prior year but still an increase from September.
With the current year-over-year decrease rate, CoreLogic predicts that the volume of homes purchases made in cash will return to pre-crisis levels by mid-2018. At their peak in January 2011, cash sales made up 46.6 percent of all home sale transactions. Deregulation of financing by the Trump Administration could help drive down cash sales.
Conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.375 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.