Investors Withdraw From Housing Market

In August, many investors withdrew from the housing market, possibly resulting from the Federal Reserve's signal that interest rates will be rising. It is no surprise then, that the portion of all cash buyers has dropped. At only 23%, cash transactions represent the lowest share since December 2009.

 First-time home buyers, who account for 30% of transactions and often rely on mortgage financing, will benefit from reduced competition with all-cash offers, fewer bidding wars, and increased inventory.  Another side effect of investor withdraw is the 1.8% decline in existing home sales from a seasonally adjusted 5.14 million in July to 5.05 million in August. This marks the first dip following four months of consecutive gains.

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