In December, the number of cash buyers purchasing homes for sale nationwide reached an all-time high, a report states. The substantial cash-buy market, though, is reportedly preventing home prices from stabilizing.
According to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, 33.2 percent of homes bought during the final month of last year were purchased with cash. Three-quarters of those cash buyers were investors.
With mortgage records showing many lenders turning down consumers who request mortgages, or at least slowing the process enough so that buyers end their attempts to obtain one, the report states investors are able to make low-ball offers on homes, many of which have been accepted.
"In competitive offer situations, cash offers prevail for the most part because of the common knowledge of lender closing issues," a real estate agent from New Jersey noted in the report, adding that cash sales typically close a few weeks earlier than FHA sales.
Investors may have plenty more chances to buy homes for historically low prices in 2012. David Goldberg, a homebuilder analyst for UBS, told the Wall Street Journal he expects home prices to remain flat this year.