Profit margins on median-priced single-family home and condo sales increased to 59% in the third quarter – the second quarter-over-quarter increase following several declines, according to ATTOM’s U.S. Home Sales Report.
The improvement in typical profit margins – up from 56.6% in the second quarter – came amid a continued rebound in the U.S. housing market that pushed the median nationwide home price up 2% to a new high of $350,000.
Both the nationwide profit margin and median home price have increased since an unusual decline from the middle of 2022 to the early part of 2023 that had threatened to reverse a decade-long market boom.
However, even as seller fortunes improved again in the third quarter, the typical investment return nationwide did remain below the 62% level recorded in the third quarter of 2022 and a high point of 62.3 percent in the second quarter of last year.
“Prices and profits around the U.S. got another boost over the summer as the housing market continued recovering from last year’s setbacks,” says Rob Barber, CEO for ATTOM, in the report. “Things do remain uncertain heading into the market’s annual Fall slowdown, especially at a time when mortgage rates are rising again, home affordability is getting tougher and the potential for a recession hangs in the air. But the latest gains fell in line with what we often see during the third quarter and showed that any predictions of an extended market fallback may have been premature.”
Gross profits on typical single-family home and condo sales across the country increased 5% from the second to third quarter, to $129,900, and were up 3.2% annually.
The continued gains in profits and prices around the U.S., while representing typical growth for a third-quarter period, still came amid a mix of forces that could turn the market up or down over the coming months.
Photo: rc.xyz NFT gallery