Pennsylvania’s housing market is continuing to see a steady increase in the number of homebuyers using only cash to purchase a home. We’ve seen the trend this year in our quarterly Welcome Home surveys, conducted by Keystone Analytics® for PAR. The share of cash-only home purchases rose from 19 percent in the first quarter to 30 percent in the most recent survey.
The National Association of Realtors® reported this trend several years ago and we’re now seeing it in Pennsylvania.
Probably one of the most surprising areas is the increase we’ve seen in cash-only purchases by homebuyers with school-aged children. We saw about a 9 percent increase between the third and fourth quarter surveys in this area.
In addition, college graduates with undergraduate degrees were nearly twice as likely to have reported buying their home with cash in the fourth quarter as they were in the third quarter survey.
As Realtors®, it’s important to remind our clients that cash-only purchases can save them closing costs and sometimes result in a discounted price of a home.
The 30-year mortgage is still by far the most popular loan product for the homebuyers surveyed, with nearly 40 percent of buyers using it. We’re finding that the buyers between 18-49 overwhelmingly choose a 30-year mortgage as their financing. With that in mind, the survey also showed that financing continues to be what many buyers find as the most stressful part of the homebuying process. We need to keep this in mind as we work with our clients, helping them understand the loan process and all of the aspects of it.
Another interesting trend in our Welcome Home survey was the continued increase in homebuyers using realtor.com® for their home search. The aggressive advertising campaign featuring Elizabeth Banks, both on TV and online ads, is showing results. For the third quarter in a row, realtor.com® showed an increase in the share of homebuyers who reported using them to look for their next home. Sixteen percent of respondents used realtor.com® to search for a home in the fourth quarter survey, compared to 10 percent of those responding in the second quarter survey and 14 percent in the third quarter. During this same time, Zillow.com has remained steady among consumers with an average of 20 percent of the respondents using the home search website in surveys throughout 2016. The number of homebuyers using Trulia dropped to 2 percent, a decline from 4 percent in the third quarter.
A summary of the Welcome Home survey is available at PARealtor.org.