ATTOM Data Solutions recently released its third-quarter 2020 U.S. Home Sales Report, which shows that profits for home sellers nationwide continue to hit high points despite the economic distress caused by the worldwide coronavirus pandemic.
The report reveals that the typical third-quarter 2020 home sale in the United States generated a gain of $85,000, up from $75,000 in the second quarter of 2020 and $66,000 in the third quarter of last year. The typical $85,000 home-sale profit represented a 38.6 percent return on investment compared to the original purchase price, up from 37.5 percent in the second quarter of 2020 and up from 33.7 percent a year ago.
Both the raw-profit and return-on-investment figures stood at the highest points since the U.S. economy began recovering from the Great Recession in 2012, and represents a continued increase even as the coronavirus pandemic has damaged the economy and led to spikes in unemployment throughout the country this year.
“Home prices and seller profits across the nation continue racking up new highs as the housing market remains relatively immune from the economic havoc caused by the Coronavirus pandemic. It’s almost as if the housing market and the overall economy are operating in different worlds,” said Todd Teta, chief product officer at ATTOM Data Solutions. “Things remain in flux, given the significant uncertainty about when the pandemic might recede or what impact the recent resurgence could have in different areas of the country. But with mortgage rates at rock-bottom levels and declining supplies of homes for sale, conditions remain in place for continued strong prices and returns.”
Here are the report highlights:
– Typical profit margins—the percent change between median purchase and resale prices—rose from the third quarter of 2019 to the third quarter of 2020 in 89 (86 percent) of 103 metropolitan statistical areas around the United States with sufficient data to analyze. Metro areas were included if they had at least 1,000 single-family home and condo sales in the third quarter of 2020.
– The West continues to have the largest profit margins in the country, with 14 of the top 15 typical home-sale returns on investment in the third quarter, from among the 103 metropolitan statistical areas with enough data to analyze. They were led by San Jose, Calif., (89 percent return); Salem, Ore., (73.9 percent); Seattle, Wash., (73 percent); Spokane, Wash., (70.3 percent) and Salt Lake City, Utah (65.1 percent).
– The biggest year-over-year increases in median home prices during the third quarter of 2020 came in the metro areas of Bridgeport, Conn., (up 29.7 percent); Detroit, Mich., (up 27.4 percent); New Haven, Conn., (up 20.1 percent); Birmingham, Ala., (up 19.7 percent) and Indianapolis, Ind., (up 19.3 percent).
– Homeowners who sold in the third quarter of 2020 had owned their homes an average of 8.13 years—a new high since 2000—up from 7.76 years in the previous quarter and from 7.91 years in the third quarter of 2019.
To read the full report, click here.