The talk in markets today is all about the huge percentage of US homes being purchased in all-cash deals. it rose to 42.7% in Q1 from 19.1% at the same time last year.
I’m skeptical of this data set because it only extends back to 2011 but it’s near-impossible to see any positive implications of so much investment buying.
US home cash sales
Bloomberg and ZeroHedge both wrote about the phenomenon today.
Bloomberg cites a Wells Fargo analyst who has the gall to cite higher mortgage rates — as if a 4.2% 30-year fixed rate is some horrible burden.
The data shows that institutional buying is beginning to tail off but the surge coincides perfectly with hints that China would invest FX reserves in US housing so it could simply be a matter of opaque data.
This chart shouldn’t just scare the Fed, it should scare everyone in Washington. A shift to a nation of renters from a nation of owners has profound implications.