Cash Sales Of New Homes At 7 Year Low

According to the National Association of Home Builders (NAHB) cash sales of new homes only accounted for 4.70% of all new purchases which is at a 7 year low.  This is a drop from 9.5% in Q4 of 2014 and the current NAHBreading is the lowest since 2010.  72.5% of all transactions that had a mortgage used conventional financing according to National Association of Home Builders was 72.5% and that was nearly a record for the report. FHA mortgage loans accounted for 14.8% and VA mortgage loans accounted for 8.1%.  

There are no clear reasons as to why cash sales declined for new homes in the NAHB report however mortgage rates have declined since going up significantly in November/December of 2016.

If mortgage rates continue to move lower this Spring/Summer than there is a good chance that cash sales for new homes may see further declines as buyers seek new mortgages.  When buying a new home you have access to both fixed rate mortgage loans and adjustable rate mortgage loans.  This report has no influence on if the mortgage industry can offer low mortgage rates or high mortgage rates.  

The National Association of Home Builders has over 2000 members and builds 80% of all new residential homes (including multi-family).  The organization was founded in the 1940’s and works towards helping it’s members be successful in building homes for Americans across the country.  The NAHB report comes out monthly and builders report their data to the organization so that they can track trends early.  The National Association of Home Builders also advocates for their members at the local, state and federal level.  Sometimes they works side by side with Realtor groups and Mortgage groups to achieve common goals when it comes to legislation.