Thursday, June 5, 2014

Home Buyers Paying With Cash

One interesting trend that has been helping to restore some luster to America's housing market: More and more people are forgoing a mortgage and paying for a home with cash. In the first quarter, 29 percent of non-investment home  buyers used cash, the highest on record for the period, according to data compiled by Bloomberg.

Loans for mortgages, on the other hand, continue to fall. Lending to buy homes dropped to $115 billion in the first quarter, the lowest that figure has been in three years, according to the Mortgage Bankers Association. In addition to cash purchases, home buyers appear to be putting down healthier down payments on their houses. In the first quarter of this year, home buyers put down $105.1 billion of their own money, up from $84.7 billion a year earlier.

There's one group that generally does pay cash for homes, and that's real estate investors. Curiously, the share of purchases made by investors has dropped to its lowest first-quarter level since 2010.

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