More homes being paid for in cash. Is this a good or a bad thing?

Here’s an interesting article from that talks about recent home sales. It seems that a large number (43%) of home sales in 2014 have been in all cash – in other words, principally by investors.

While some experts think that the trend may be harmful (i.e. putting the housing market in the hands of a few large investment firms) I am also glad when individuals purchase with cash. It means they are using the tools that the wealthy have used for years to make a little money.

Here’s an interesting paragraph:

So who does have the money to buy a home outright? Wealthy Americans and downsizing empty nesters make some of these all-cash deals, he says. Investors who are eager to make a profit by buying low and renting those properties — or flipping them — also drive up the number of all-cash deals, he adds.

Americans are still buying homes in all-cash deals, despite more investors leaving the market, according to a new report. MarketWatch’s Quentin Fottrell discusses what cash deals means for the housing recovery on MarketWatch.

Institutional investors — people or companies that have purchased at least 10 properties in a calendar year — appear to be gradually pulling out of the housing market. Investors accounted for 5.6% of all U.S. residential sales in the first quarter, down from 6.8% in the fourth quarter of 2013 and 7% in the first quarter of 2013. But while the share of institutional investor buyers declined in 18 of the top 20 markets for institutional investors, home prices continued to appreciate in most of those markets, although at a slower pace. “But price appreciation will definitely flatten out,” he adds.

You can read the whole article here:

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