Shelter Six: Cash Sales Drop to Lowest Level in 13 Years

January 4, 2021 by · Leave a Comment 

Last week, Congress passed a $900B Covid Relief Bill which includes supplemental unemployment benefits of $300 per month and direct payments to qualifying individuals of $600 per month.

With vaccines already rolling out and more economic stimulus expected, the financial markets remain optimistic about the future, as evidenced by a rising stock market.

Pending home sales slid for the 3rd straight month in November, but the small 2.6% decline was largely due to the shortage of inventory and fast-rising home prices.

According to Lawrence Yun, NAR’s chief economist, “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”

The share of cash sales was down to 24% in 2020, the lowest level in 13 years according to a new report from Redfin.

Over the last 20 years, the lost point for cash sales was 20.7% in 2006 and the high point was 34% in 2013. The main reason for the decline is people taking advantage of low rates.

Rate Update

Mortgage rates remain near all-time lows and, with no changes to the Fed’s bond purchase program in sight, rates are expected to stay near low levels over the 1st Quarter.

This Week

The ISM National Manufacturing Index will be released on Tuesday, the ISM National Services Index on Thursday, and the monthly Employment figures on Friday.