Black Knight: All-Cash Sales More Prevalent For Lower-Priced Homes

Black Knight’s April Mortgage Monitor includes a stunning revelation: All-cash sales are more prevalent for lower-priced properties than they are for higher-priced properties.

The report finds that cash sales make up about 30% of purchases of homes in the top 20% of market value, yet they make up about 62% of purchases of homes in the lowest 20% of market value.

“The prevalence of cash sales at the low end of the market can likely be chalked up to two primary factors,” explains Ben Graboske, senior vice president of data and analytics for Black Knight, in a release. “First, negative equity is still higher than average among this segment of the market, resulting in increased distressed discounts for buyers. Second, lower-priced homes simply require less capital to purchase outright, making cash sales possible for more people.”

During the first quarter, about 35% of all single-family home sales were all-cash sales – down from 37% in the first quarter of 2015 and down from 45% in the first quarter of 2011.

“As the inventory of distressed properties has dried up nationwide, the overall share of cash sales has been on the decline, as well,” Graboske says. “What’s striking, though, is the disparity between the high and low ends of the market.”

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