Home price gains push seller profits back up to near-decade-high
Profit margin on home sales and median home prices rebounded after three straight quarterly drop-offs, according to a new report from ATTOM.
For the first time in a year, profit margins on sales of median-priced single-family home and condo properties jumped 47.7% in Q2, up from 43.9% in Q1. When measured in raw dollars, gross profits soared 17% to $113,00 quarter over quarter, although they were still down 5% annually.
The profit gains come as the median single-family and condo price shot up 10.4% quarterly to $350,000 in the second quarter.
“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 of 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.”
However, the typical investment return remained below the recent high of 53.2%, recorded a year earlier.
“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,” Barber said. “But the second-quarter numbers clearly show the market has more steam left in it, and sellers are reaping the benefits.”
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