The percentage of homes bought with cash reached a record 33 percent in February, up from 32 percent last month, as tight credit and foreclosures continue to drag down the market, the National Association of Realtors reported today.
All-cash purchases are at the highest level since the NAR started tracking them in October 2008. All-cash deals accounted for 20 percent of sales in 2009, and 15 percent in 2008.
“The decline in price corresponds to the record level of all-cash purchases where buyers – largely investors – are snapping up homes at bargain prices,” said Lawrence Yun, chief economist for the National Association of Realtors. “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.
Investors accounted for 19 percent of sales in February and 23 percent of sales in January, according to NAR data.
A sharp decline of 9.6 in existing home sales in February erased three months of gains that had been attributed to low prices and a recovering job market, the NAR said.
“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand,” said Yun in a prepared statement. “With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes.”