U.S. Cash Sales This Year Suffer Their Lowest Start Since 2008

Cash sales in the U.S., historically driven by foreign and wealthy homebuyers, had their lowest start this year since 2008, according to a new report released Wednesday.

Home sales paid in cash accounted for 31.6% of all transactions in April 2016, a 2.8% decrease from the same month last year and 1.6% fewer than in March, CoreLogic reported. Between January and April, the share was 33.9%, the lowest start in eight years.

In the 12 months ending March 2016, 73% of non-resident foreigners paid for their homes in cash, according to a separate report by the National Association of Realtors released earlier this month. Canadians led this type of transactions with 73%, followed by Chinese nationals (71%) and British buyers (58%).

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The NAR report also found that Florida is the No. 1 U.S. destination for foreign homebuyers, with 22% of all transactions. It is no coincidence, then, that Florida recorded the largest share of cash sales of any state, at 45.5%, according to CoreLogic’s data.

In New York, a major destination for wealthy buyers, cash sales represented 44.2% of purchases.

Both states saw cash sales decrease from March (47.5% and 45.9%, respectively) as a strong dollar and global uncertainty continued to hit international home sales, the CoreLogic data show.

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In the year ending March 2016, foreign buyers purchased $102.6 billion worth of residential property, compared with $103.9 billion in the previous 12-month period, according to NAR.

Cash sales in the U.S. peaked in January 2011, when they accounted for 46.6% of deals nationwide. CoreLogic forecasts that if the share of cash sales continues to fall at the same rate it did in April, it will hit 25% by mid-2018, its level prior to the housing crisis.

States recording largest shares of cash sales in April 2016

Source: CoreLogic