ATTOM today released its second-quarter 2024 U.S. Home Sales Report, which shows that home sellers earned a 55.8% profit margin on typical single-family home and condo sales in the United States during the second quarter — a figure essentially flat both quarterly and annually.
The real estate data company says that profit margins rose about one percentage point from the first quarter of 2024, but remained down one point from the second quarter of 2023. The nationwide investment return was still far behind a highwater mark hit in 2022, despite the median U.S. home price shooting up during the spring home-buying season to a new record of $365,000.
The price surge did help boost typical raw profits for sellers back over $130,000. “The second-quarter profit report offers a mixed bag of plusses and minuses that added up to an overall picture of not much change for sellers,” said Rob Barber, chief executive officer for ATTOM. “Prices jumped back upward, which was great news for owners. So did raw profits. Profit margins also remained historically elevated. But the bottom-line profit-margin trend didn’t move much at all because soaring prices are far from a new thing. Even greater price improvements will be needed to kick margins up over the rest of the year.”
The latest price and profit numbers reflect a period when the national median home value shot up 9% quarterly and 6% annually. Those gains came amid the usual springtime rise in demand among house hunters, combined with home mortgage rates remaining relatively stable at just below 7% for a 30-year fixed loan.
Typical profit margins – the percent difference between median purchase and resale prices – increased from the first quarter of 2024 to the second quarter of 2024 in 94 (58.8%) of the 160 metropolitan statistical areas around the U.S. But, they remained down annually in 100, or 62.5%, of those metros.
"High-end" metro areas, where home values generally exceeded $350,000, bore the brunt of the year-over-year decline in profit margins. Approximately 75% of these areas experienced a drop in typical margins, compared to about half of the lower-priced markets, with the biggest year-over-year decreases in profit margins in the metro areas of Hilo, Hawaii (margin down from 80.5% in the second quarter of 2023 to 45.3% in the second quarter of 2024); Port St. Luce, Fla. (down from 95% to 73.9%); and Daphne-Fairhope, Fla. (down from 49.8% to 34%).
The raw profit on median-priced home sales nationwide, measured in dollars, rose 10.1% quarterly and 5.2% year over year during the months running from April through June of 2024. The latest raw profit of $130,712 marked the high point since a level of $135,000 in the Spring of 2022.
Typical raw profits were up quarterly in 134, or 83.8%, of the markets analyzed, and annually in 86, or 53.8%. The biggest year-over-year increases in raw profits on typical sales among metro areas with a population of at least 1 million were in Chicago, Ill. (up 21.6%); Hartford, Conn. (up 18.4%); and Rochester, N.Y. (up 18%).
Spring Price Surges
The median price of single-family homes and condos across the country grew from $335,000 in Q1 2024 to $365,000 in Q2. It also was up from $344,000 in the second quarter of last year. On a quarterly basis, the typical value increased in 95.7% of the metro areas around the country, hitting new highs in about 75% of those markets. The Midwest and Northeast saw about 75% of the metro areas in those regions experiencing gains of at least 5% annually.
Metro areas with the biggest year-over-year increases in median home prices were Des Moines, Iowa (up 16.8%); Trenton, N.J. (up 16.2%); and Fort Wayne, Ind. (up 15.2%).
