Typical profit margins on home sales grew from 43.9% to 47.7% in Q2 2023, as the median nationwide home price rose 10% to $350,000, according to a new report from ATTOM. This was the first gain seen in a year.
ATTOM’s U.S. Home Sales Report for Q2 2023 found that gross profits also shot up by 17% on the typical single-family home and condo sale across the country, to $113,000, although they were still down 5% annually. On the other hand, the typical investment return nationwide did remain below the recent high point of 53.2%, recorded a year earlier.
Key highlights:
- Typical profit margins increased in 107 (69%) of the 156 metro areas around the U.S. with sufficient data to analyze. However, they were still down in 118 (76%) of those metros compared to last year.
- Typical profit margins decreased quarterly in just 49 of 156 metro areas (31%).
- Profits on median-priced home sales nationwide, measured in raw dollars, increased from $96,573 To $113,000, a 17% gain. Typical raw profits went up quarterly in 137 (88%) of the metro areas analyzed for this report.
- Annually, however, raw profits remained down 4.6% from a record high of $118,400 last year. They dropped YoY in 65% of the markets analyzed.
- Median single-family home and condo prices increased in 150 (96%) of the 156 metro areas and were up annually in 94 of those metros (60%).
- Nationwide, the median home price rose to $350,000, up 10.4% from $317,000 last quarter and 2.4% from $341,750 last year.
- Homeowners who sold recently owned their homes an average of 5.76 years. That was up from a low point over the past decade of 5.59 years last quarter, but still down from 5.84 years last year.
- Average tenure remained down from last year in 47% of metro areas with sufficient data.
- All 15 of the longest average tenures among sellers were in the Northeast or West regions of the U.S.
- Home sales following foreclosures by banks and other lenders represented just 1.4% (one of every 69) U.S. single-family home and condo sales. That was down from 1.7% last quarter, although up from 1.1% last year. Still, it remained just a tiny fraction of the 30% peak this century hit in 2009 during the aftermath of the Great Recession of 2007.
- All-cash purchases accounted for 35.9% of single-family home and condo sales, down from 39% last quarter but unchanged from last year.
- Institutional investors nationwide accounted for 6.1% (one of every 16) single-family home and condo purchases, up from 5.7% last quarter but still down from 7.4% last year.
- Buyers using Federal Housing Administration (FHA) loans comprised 9.4% of all single-family home purchases (one of every 11), up from 8.4% last quarter and from 6.7% a year earlier. The latest increase marked the fourth consecutive quarterly gain.
Major takeaway:
“Just when it looked like the housing market was flattening out, prices spiked again, which pushed seller profits back up to nearly their highest level in the past decade,” said Rob Barber, CEO for ATTOM. “Stable mortgage rates, an ongoing tight supply of homes for sale and the usual Springtime surge in buyer demand appeared to have combined to halt the downturn we started seeing a year ago. It’s way too early to predict another long-term price run-up, especially since buying a home is a financial stretch for so many households around the country. But the second-quarter numbers clearly show the market has more steam left in it and sellers are reaping the benefits.”
For the full report, with additional data on metro areas, click here.
