Cash sales have declined overall, but they still account for the majority of sales in the lowest 20 percent of property values, according to Black Knight Financial Services’ April 2016 Mortgage Monitor released Monday. Overall, the cash sales share has declined from its peak of 45 percent in Q1 2011 down to 35 percent for Q1 2016.
There is still a great disparity between the high and low ends of the market when it comes to cash sales. Cash sales accounted for about 30 percent of transactions in the top 20 percent of homes by value in their respective markets, but accounted for 60 percent of all transactions among properties valued in the lowest 20 percent. The disparity can be attributed to more negative equity in the lower end of the market and less capital required to purchase lower-end homes.
The nation’s unemployment rate fell down to 4 point 7 percent in May, but job gains came in at only 38 thousand, well below expected totals, according to the Bureau of Labor Statistics’ May 2016 Employment Situation released on Friday. According to Realtor.com chief economist Jonathan Smoke, quote, diminishing job growth also raises concern about longer-term demand for housing later this year and into 2017, close quote. Smoke said that slow job growth will eventually have a negative impact on household formation.