The share of homes that were all-cash transactions in October 2015 fell by 2.6 percentage points over-the-year down to 34 percent, meaning that of all residential home sales during the month, slightly more than a third were paid for in cash, according to data released by CoreLogic on Thursday. The cash sales share has been on a steady decline since hitting its peak of 46.6 percent in January 2011. The pre-crisis average for the cash sales share is about 25 percent; CoreLogic estimates the cash sales share will reach that level in mid-2018 if it continues to decline year-over-year at the rate it did in October 2015.
A steep decline in REO sales is the main driver behind the decline in cash sales. At their peak in January 2011, REO sales made up nearly a quarter of all residential home sales; by October 2015, REO sales made up less than a third of that total. The drop in REO sales over the last five years has corresponded with the drop in foreclosure activity. CoreLogic reported in its November 2015 National Foreclosure Report that foreclosure inventory had declined year-over-year for 49 months in a row and was at 1 point 2 percent—the same level as in December 2007, prior to the crisis.
Elected officials and community leaders in cities nationwide rallied on Thursday to protest the sales of deeply delinquent mortgage loans by Fannie Mae, Freddie Mac, and HUD to Wall Street investors and speculators. Baltimore, Philadelphia, New York, and San Francisco are a few of the cities that are pressing the GSEs to sell troubled mortgage loans to non-profits instead of private equity firms. The leaders of the campaign are Alliance of Californians for Community Empowerment and its national partner organization, Center for Popular Democracy.