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ATTOM: Home Sellers’ Profit Margins Nearly Flat in Second Quarter
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(Image courtesy of ATTOM)
ATTOM, Irvine, Calif., released its second-quarter 2024 U.S. Home Sales Report, which showed that home sellers earned a 55.8% profit margin on typical single-family home and condo sales during the second quarter.
That result is pretty flat–roughly one percentage point above Q1 and one percentage point below Q2 2023.
“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 raw profit on median-priced homes–measured in dollars–rose 10.1% quarterly and 5.2% annually in Q2. However, the purchase prices of many of those homes were also elevated, dragging down the results.
The median price of a single-family home or condo increased to $365,000 in Q2 from $335,000 in Q1. It was $344,000 in Q2 2023.
Homeownership tenure of those who sold their houses in the quarter was up slightly, to 7.88 years. That compares with 7.7 years in Q1 and 7.59 years in Q2 2023.
Home sales following foreclosures were 1.4% of sales, down from 1.7% in Q1 and 1.5% in Q2 2023.
All-cash purchases accounted for 39.1% of single-family home and condo sales, down from 41.6% in Q1 but up from 37.1% in Q2 2023.
Institutional investors made up 6% of all single-family home and condo purchases. That’s a drop from 6.4% last quarter and 6.6% in Q2 2023.