USA
BY JOHN CHIN
Cash Buyers Still A
Large Proportion
What you have to know…
N
ominal growth in the U.S. housing market
continues in 2014. Existing home sales rose
1.3% to a 4.65 million unit pace. The gain
was the first since December and was driven by a big
uptick in sales of condominiums and co-ops.
Despite the modest increase in sales, there are signs
of robust recovery within the existing home market.
Decline from the housing bust is continuing to
gradually recede. Housing starts (new construction
homes) are on a strong climb, up 85% since 2009 lows.
Distressed sales have steadily fallen over the past year,
with bank-owned inventory and short sales shrinking
to five-year lows, and investors account for a smaller
proportion of homebuyers. Inventories increased,
which is a good sign for the market. Many potential
buyers have been put off by the lack of available
inventory or have been out-bid by cash buyers. Cash
buyers still represent a large proportion of buyers,
reflecting tighter underwriting standards and more
stringent income documentation requirements.
New home sales improved this past month, with
sales jumping 6.4% to a 433,000-unit pace. Sales
40
for March were also revised higher. Most of April’s
gain was concentrated in the Midwest, where sales
surged 47.4% during the month. That gain may have
been helped by milder spring weather. Sales fell by
26.7% in the Northeast, rose 3.1% in the South and
The la