Fewer Americans are paying for their homes in cash, MarketWatch reported.
All-cash purchases accounted for almost 38 percent of residential property sales in the second quarter of 2014, down from a three-year high of 42 percent in the previous quarter, and up slightly from 36 percent in the second quarter of 2013, according to data released today by real-estate data firm RealtyTrac. However, recent trends point to a continued fall in the number of all-cash sales, said Daren Blomquist, a RealtyTrac vice president.
"This data, combined with the drop in institutional investor activity to a three-year low, signifies that the housing market recovery is transitioning from one that is driven largely by investors and other cash buyers to one that is going to be more reliant on first-time home buyers and other non-cash buyers," he said.
Wealthy Americans, downsizing empty nesters, foreign buyers flush with cash from regions like Russia and the Far East, and U.S.-based institutional investors make up the eclectic group involved in the all-cash market, experts say. But the fall in the latter category shows that the all-cash market has turned a corner, Blomquist said.
Institutional investors - entities that purchase at least 10 properties in a calendar year - made up approximately 4.7 percent of all sales of single-family homes and condominium units in the second quarter of 2014. That's down from 5.3 percent in the first quarter and down from 5.8 percent for the same period last year.
Cash remained king in Las Vegas, Detroit, Kansas City, Cleveland and Philadelphia. where cash sales made up at least 45 percent of purchases,CNNMoney reported.