Investors may be pouring less cash into houses, according toRealtyTrac.

The real estate data company said institutional investorspurchased fewer homes in the second quarter of this year than inboth the first quarter of this year and the second quarter of 2013,suggesting that the flow of cash purchases which had disrupted somehousing finance markets is slowing.

Nationally, 37.9% of all homes purchased in second quarter of2014 were purchased for cash, RealtyTrac reported. That's down fromthe three-year high of 42% in 2014's first quarter but still higherthan the 35.7% of homes purchased for cash in the second quarter of2013, the California-based firm said.

“The flurry of purchases by institutional investors and othercash buyers that kicked off two years ago when U.S. home prices hitbottom is finally showing signs of subsiding,” said DarenBlomquist, RealtyTrac vice president, noting that the U.S. medianhome prices bottomed out in March 2012.

“Over the past 10 quarters cash sales have accounted for 39% ofall home sales on average, and institutional investor purchaseshave accounted for 5.3% of all home sales on average. Prior tothat, from 2001 to 2011, the average quarterly cash share was 30%,and the average quarterly institutional investor share was2.6%”

This move should help first-time homebuyers, Blomquist said.

“This is a classic good news/bad news scenario for the housingmarket,” he said. “The good news is that fewer cash buyers shouldhelp loosen up inventory of homes for sale and reduce competitivebidding, giving first-time homebuyers and other non-cash buyersmore opportunities. The bad news is that some of those first-timehomebuyers and other non-cash buyers may already be priced out ofthe market thanks to the rapid run-up in home prices over the pasttwo years in many areas.”

Significantly, the report found that cash real estate purchasesin the second quarter skewed to both ends of the real estate pricespectrum. While cash purchased 37.9% of homes overall, it purchased67% of homes selling for $100,000 or less and 45% of homes sellingfor more than $2 million, the report said.

RealtyTrac said there were seven metropolitan areas where cashpurchases represented more than 50% of second quarter sales: six inFlorida and one in Nevada. The six Florida metropolitan areasincluded Miami (64.1% purchases in cash), Fort Myers (62.1%),Sarasota (61.5%), Tampa (54.6%), Lakeland (53%) and Orlando(52.2%). In Las Vegas, 50.7% of the purchases were in cash, thefirm reported.

Greg Barnes, SVP for marketing at One Nevada Credit Union, saidhe had not seen the RealtyTrac report but that it appeared toresonate with what the $722 million credit union had beenseeing.

Barnes said his credit union had seen investors making cash realestate purchases in the markets it served starting in 2012 andextending into 2013, but there had been a drop off in investoractivity in 2014.

Barnes linked the declining investor interest in Las Vegasproperty to the diminishing pool of available homes and acorresponding uptick in prices. The higher prices discouraged somecash investors who had been looking for big returns, he said.

Although headquartered in Las Vegas, One Nevada draws itsroughly 76,000 members from around the state. This broadermembership has helped the credit union maintain a refinancebusiness through the HARP program as it worked to increase itspurchase money business.

According to the credit union's financial statements, One Nevadabooked more than $86 million in mortgage loans as of the end ofJune, with about 50% of those HARP refinances and about 50% inpurchase money loans.

Meanwhile, Matt Kershaw, vice president for sales and mortgagelending for the $531 million Clark County Credit Union, said hisLas Vegas institution has booked about $15 million in purchasemoney loans so far in 2014 and that this is about 30% less thanlast year.

Like One Nevada, CCCU has seen investor activity peak and thenretreat, Kershaw said. “It was a more substantial problem during2012 and 2013, but during 2014 the cash investor has backed out ofthe market,” he said, adding the credit union had sought to improveits purchase money procedures to help its member become bettercompetitors.

“We developed new mortgage products that provide greater accessto all of our members, including those who had problems through themortgage crisis, i.e. short sale, foreclosure, bankruptcy,” Kershawwrote in an email. “Additionally, we have worked diligently toreduce our closing times so that we are better able tocompete.”

Credit unions in Florida reported similar trends.

Don Genevie, SVP for real estate and business lending at the $2billion Grow Financial Federal Credit Union, reported the Tampa,Fla., institution had seen cash investors have an impact on thehome aspirations of some of its 174,000 members in 2013, but thepressure had diminished somewhat.

Genevie credited a drop in available housing stock for slackinginvestor appetite, noting that the Tampa metropolitan areacurrently carried four months or less of housing stock, when itwould customarily carry about six months' worth.

“I've been doing this 38 years, and I have never seen a marketquite like this one,” Genevie said, noting that cash investorpressure had been felt across the state and that the credit unionhad adopted things like commitment-to-buy letters to help a creditunion member compete in bidding battles.

A loan commitment letter signifies not only loan preapproval,but that an underwriter has reviewed the application and the letterwill include all conditions to the loan approval. It demonstratesthat much of the most time-consuming part of the housing financeprocedure has already been finished.

Genevie said investors had purchased so much of the existinghousing stock in Tampa, the credit union worried about what mighthappen if the rental market began to fail.

“It's still cheaper to buy a house here than rent one,” Genevieobserved, adding that he worried about whether many of theinvestors might conclude they need to liquidate the investment andput all their homes on the market at once.

Genevie acknowledged such mass marketing would be against theinvestors' own interest by driving prices down further, but therewas no way of knowing what legal or organizational structuresunderpinned some of the investor groups that had purchased so muchhousing. “If a partnership fails or if something else happens, theycould wind up selling quickly,” he said.

“The smart thing to do would be for them to release theirhousing a little bit at a time,” Genevie said. “If they did thatand released enough to move increase our housing stock to a sixmonths' supply, they would still make money.”