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Home Sellers See Shrinking Profits

Apr 28, 2025
declining profits

Typical U.S. home sale profits dipped to 50% in Q1 2025, down nearly 5 points year-over-year, according to ATTOM data

The soaring profits homeowners once enjoyed from property sales continue to ease, but remain strong by historical standards, according to ATTOM’s latest U.S. Home Sales Report.

Homeowners made a typical profit of 50.2% on single-family home and condo sales in the first quarter of 2025, down 3.2 percentage points from the previous quarter and 4.8 points from the same time last year. The national median profit margin has declined gradually since the summer of 2022, when it peaked at 64%.

Yet despite the slip, sellers are still reaping sizable returns. "Sellers may not be enjoying quite the same windfall they were a few years ago but by historical standards profits are strong, both in terms of margins and raw dollar value," said Rob Barber, CEO for ATTOM. "The first quarter also tends to be the weakest of the year, so don't be surprised to see profits regain ground during the summer months."

Profit Margins Decline Across Most Metro Areas

Profit margins dropped in 77% of the 128 metro areas analyzed compared to the previous quarter, and in 83% compared to a year earlier.

Florida and California markets led the losses: Punta Gorda, Fla. saw margins tumble from 106.3% to 69.2%; Ocala, Fla. dropped from 99.9% to 66.7%; and Bakersfield, Calif. slid from 81.1% to 58.9%. Among major metros, San Jose, Calif. declined sharply from 105% to 88.8%, and Tampa, Fla. from 73.9% to 59.1%.

Still, markets like Toledo, Ohio, and Birmingham, Ala. bucked the trend with year-over-year profit margin gains.

Even with the widespread declines, 60% of metro areas still posted profit margins above 50%. San Jose, Calif. topped the list with an 88.8% margin, followed by Buffalo, N.Y. (82.2%) and Seattle, Wash. (75.3%).

At the lower end, New Orleans, La. (18.1%) and San Antonio, Texas (24.5%) posted the smallest typical returns.

Raw Profits Hold Steady

The typical raw profit — defined as the dollar difference between purchase and sale — remained stable year-over-year at just under $119,000 nationally. However, 58% of metros experienced a drop. Notably, New Orleans, La. saw raw profits fall by 27.6%, while Dallas, Texas, fell by 17.8%.

California cities dominated the top of the raw profit list: San Jose sellers banked $710,000 on average, followed by San Francisco ($411,000) and San Diego ($360,000).

Home Prices Remain Near Peaks

Median home sale prices nationally held steady at $355,000 in Q1 2025, just slightly below the record $358,000 in Q3 2024, and 6% higher than a year ago. Price growth was particularly strong in markets like Syracuse, N.Y. (up 18.8%) and Toledo, Ohio (up 18.5%).

Meanwhile, markets in Florida and Idaho saw notable declines, including Cape Coral, Fla. (down 9%) and Boise City, Idaho (down 5.2%).

Homeowners are holding onto properties longer before selling. The average tenure reached 8.12 years in Q1 2025, about six months longer than a year earlier. Some regions, like Barnstable, Mass. (14.8 years) and New Haven, Conn. (13.1 years), saw even longer ownership spans.

Cash transactions made up 42% of home sales — the highest level since 2014. In some markets like Claremont, N.H., nearly 70% of sales were all-cash. Institutional investors also edged back into the market, accounting for 6.3% of sales, reversing a recent downward trend.

Meanwhile, FHA-financed purchases slipped slightly to 8.3% nationally.

 

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Published
Apr 28, 2025
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