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New Home Sales: Cash Purchases on the Rise
Robert Dietz / Eye on Housing / July 25, 2014
The share of new single-family home sales purchased with cash rose during the second quarter of 2014, reaching 8.4% of sales.
The onset of the housing crisis in 2007 led to a decline in the share of new home sales due to conventional mortgage financing and increases in the shares due to mortgages backed by the FHA and the Department of Veteran’s Affairs (VA), as well as cash purchases.
The second quarter data from the Census Bureau’s Quarterly Sales by Price and Financing indicates that count of cash-based new home sales rose to 10,000 for the quarter, matching a cycle high. During the 2002-2003 period, cash sales made up only 4% of purchases. In contrast, cash purchases constitute a considerably larger share of the existing home market – 32% of sales in June 2014 for example.