Typical profit margins on home sales increased to 59% in Q3 2023—up from 56.6% last quarter and the second straight quarterly increase—and the median nationwide home price rose by 2% to a new high of $350,000.
ATTOM’s U.S. Home Sales Report for Q3 2023 found that gross profits also grew 5% on the typical single-family home and condo sale across the country, to $129,900, and they were up 3.2% annually. Additionally, the typical investment return nationwide did remain below the 62% level recorded in Q3 last year.
Key highlights:
- Typical profit margins increased in 85 (55 percent) of the 155 metro areas. However, they were still down annually in 103 (66%) of those metros as the recent improvements were not enough to wipe out the earlier losses.
- Typical profit margins decreased quarterly in 70 of the 155 metro areas analyzed (45%).
- Profits on median-priced home sales increased from $123,716 to $129,900, a 5% gain. Typical raw profits went up quarterly in 95 (61%) of the metro areas analyzed for this report.
- Median single-family home and condo prices increased from the second to the third quarter of 2023 in 110 (71%) of the 155 metro areas around the country with enough data to analyze, and were up annually in 125 of those metros (81%).
- Home prices tied or hit new highs during the third quarter of 2023 in 86, or 55 percent, of the 155 metro areas in the report.
- Homeowners who sold in the third quarter of 2023 had owned their homes an average of 7.86 years, which marked the second highest point since 2000. The latest figure was up from 7.6 years in the second quarter of 2023 and from 7.21 years in the third quarter of 2022.
- Average tenure was up from the third quarter of 2022 to the same period this year in 96 percent of metro areas with sufficient data. The top 40 longest average tenures among sellers in the third quarter of 2023 were in the Northeast or West regions of the U.S.
- Home sales following foreclosures by banks and other lenders represented just 1.4%, or one of every 73 single-family home and condo sales, down from 1.5% last quarter but up from 1.1% last year.
- Institutional investors nationwide accounted for 5.9%, or one of every 17 home purchases, down from 6.2% last quarter and from 7.6% last year.
- Buyers using Federal Housing Administration (FHA) loans comprised 8.8% of all home purchases (one of every 11). That was down from 9.3% last quarter but still up from 8% last year.
Major takeaway:
“Prices and profits around the U.S. got another boost over the Summer as the housing market continued recovering from last year’s setbacks,” said Rob Barber, chief executive officer for ATTOM. “Things do remain uncertain heading into the market’s annual Fall slowdown, especially at a time when mortgage rates are rising again, home affordability is getting tougher and the potential for a recession hangs in the air. But the latest gains fell in line with what we often see during the third quarter and showed that any predictions of an extended market fallback may have been premature.”
“The level of cash sales has inched up over the past year as mortgage rates in the U.S. have continued their march higher, now close to an average of 8 percent for a 30-year loan,” Barber added. “If rates keep rising, that should continue creating favorable conditions for more all-cash deals.”
For the full report, with additional data on metro areas, click here.
