Investors Fuel the Market - 38% of Homes Purchased With Cash

Despite record low mortgage rates, 2011 has seen a surprisingly high level of cash home purchases.  Between tight lending standards and a desperate search for yield by investors, cash purchase of homes (especially distressed properties) became even more common in 2011 than last year.  According to data from Housing IntelligencePro , 38% of homes purchased in 2011 were bought with all cash.  That's up from 34% in 2010, and double the 19% rate in 2006.  The trend is likely to continue in the near term, with investors being responsible for an increasing share of home purchases as prior home owners abandon the ownership market and head back to rentals.