A Welcome Home quarterly survey released by the Pennsylvania Association of Realtors showed Pennsylvania homebuyers who paid cash for a house were also more likely to have a lower income.
“While it seems counterintuitive that one in three buyers with incomes under $50,000 reported buying homes in cash, age may be driving a higher share of lower-income respondents reporting cash-only purchases,” said PAR President Kathy McQuilkin. “The survey showed 75 percent of cash-only buyers were over 50 years old, while 64 percent of those with an income of under $50,000 were over 50 years old.”
The survey showed cash-only home purchases overall dropped to the historical averages so far in the first quarter of 2017, following two quarters of increasing numbers. Since the first Welcome Home survey in 2015, an average of 23 percent of homebuyers surveyed reported buying their homes in cash. Last year in the fourth quarter, the share of cash-only purchases peaked at 30 percent of all respondents.
According to research conducted by the Greater Lehigh Valley Realtors on sold houses in the first quarter from January to March 14, a total of 1,091 residential units were sold in Lehigh, Northampton and Carbon counties. Of those, cash transactions numbered 307.
While the GLVR does not track demographics or age in home sales for Lehigh, Northampton and Carbon counties, the PAR survey shows a wealth gap exists between those ages 35 and younger and those 50 and older, said Justin Porembo, CEO of GLVR, based in Hanover Township, Northampton County.
Younger people often do not have enough time to save and invest over time as compared to adults older than 50.
“I could see why they are tracking why so many cash deals are over the age of 50,” Porembo said. “It really shows the disparity. It’s an issue that we are tracking because we want to see the first-time homebuyer coming in. A lot of this has been due to student debt. It’s something of a challenge that needs to be addressed.”
