Profit Margins on Typical Home Sales Hit Another Record, Rising to 56 Percent. ATTOM, a leading curator of real estate data nationwide for land and property data, today released its second-quarter 2022 U.S. Home Sales Report, which shows that profit margins on median-priced single-family home and condo sales across the United States hit another new record of 55.5 percent following the largest quarterly gain in a decade.
On the heels of a lackluster first quarter of 2022 that suggested possible weakness in the nation's long-running housing market boom, the latest typical profit margin was up from 48.3 percent in the first quarter of 2022 and 42.9 percent in the second quarter of 2021. It was more than 20 points above the 32 percent figure from the second quarter of 2020.
"Home sellers in the second quarter continued to benefit from the rapid growth in home price appreciation the country has experienced over the past few years," said Rick Sharga, executive vice president of market intelligence at ATTOM. "While price growth may slow down as higher mortgage rates dampen demand from prospective homebuyers, home sellers should continue to profit from the record $27 trillion in homeowner equity in today's market.
"While profit margins routinely go up during the Spring home-buying season, the latest spike of more than seven percentage points marked the largest quarterly gain since at least 2008. The year-over-year gain of 13 points in the typical return on investment was one of the largest in the past decade.
Gross profits also hit new highs in the second quarter of 2002, after dipping slightly in the early months of the year. The typical single-family home and condo sale across the country generated a gross second-quarter profit of $123,869, up 19 percent from $103,750 in the first quarter of 2022 and up 38 percent from $90,000 a year earlier.
The second-quarter records for gross profits and profit margins came as the national median home price hit a new high of $346,000 in the second quarter of 2022 – the 10th straight quarterly increase. The latest median value was up 8.8 percent from the first quarter of 2022 and 15.3 percent from the second quarter of 2021.
The second quarter profit figures showed how strong the nation's housing market prices remained despite rising economic uncertainty and home-mortgage rates that have surged this year. Average mortgage rates have nearly doubled from a year ago, reaching almost 6 percent for a 30-year fixed rate loan, making affordability a challenge for many potential homebuyers. These higher rates, coupled with rising home prices, the highest U.S. inflation rates in 40 years, and soaring food and fuel prices are all headwinds threatening to slow down what has been a white-hot housing market over the past few years. Still, home prices and seller profits surged anew in the second quarter, after a first quarter that saw a rare dip in investment returns.
Typical profit margins – the percent change between median purchase and resale prices - increased from the first quarter of 2022 to the second quarter of 2022 in 162 (89 percent) of the 183 metro areas around the U.S. with sufficient data to analyze. They were up annually in 174 of those metros (95 percent). Metro areas were included if they had at least 1,000 single-family home and condo sales in the second quarter of 2022 and a population of at least 200,000.
The biggest annual increases in profit margins came in the metro areas of Fort Myers, FL (margin up from 47.1 percent in the second quarter of 2021 to 90.9 percent in the second quarter of 2022); Naples, FL (up from 40.4 percent to 83.1 percent); Ocala, FL (up from 44.4 percent to 85.2 percent); Gulfport, MS (up from a loss of 6.5 percent to a gain of 30.8 percent) and Yuma, AZ (up from 42.7 percent to 77.8 percent).
The biggest annual profit-margin increases in metro areas with a population of at least 1 million in the second quarter of 2022 were in Orlando, FL (margin up from 36.4 percent to 67.6 percent); Tampa, FL (up from 47.4 percent to 76.3 percent); Miami, FL (up from 38.9 percent to 66.8 percent); Cleveland, OH (up from 21.4 percent to 42.1 percent) and Jacksonville, FL (up from 43.4 percent to 63.4 percent).
Profit margins decreased annually in just 20 of the 183 metro areas analyzed (11 percent) and annually in only nine metro areas (5 percent). The biggest annual decreases were in Salem, OR (margin down from 87.5 percent in the second quarter of 2021 to 55 percent in the second quarter of 2022); Hilo, HI (down from 140.8 percent to 110.5 percent); Boise, ID (down from 122.8 percent to 100.1 percent); Salisbury, MD (down from 57.1 percent to 48.6 percent) and Albany, NY (down from 35.4 percent to 28.3 percent).
The largest annual decreases, or smallest gains, in profit margins among metro areas with a population of at least 1 million came in Atlanta, GA (down from 48.9 percent to 42.8 percent); Sacramento, CA (up from 61.5 percent to 62.5 percent); San Francisco, CA (up from 81.5 percent to 83.1 percent); Washington, DC (up from 44.9 percent to 46.7 percent) and Boston, MA (up from 49.8 to 52.9 percent).
Median home prices in the second quarter of 2022 exceeded values from the prior quarter in 181 (96 percent) of the 183 metropolitan statistical areas with enough data to analyze and were up annually in 180 of those metros (96 percent). Nationally, the median price of $346,000 in the second quarter was up from $318,000 in the first quarter of 2022 and $300,000 in the second quarter of last year.
The biggest annual increases in median home prices during the second quarter of 2022 were in Gulfport, MS (up 55.3 percent); Naples, FL (up 36 percent); Lakeland, FL (up 35.7 percent); Fort Myers, FL (up 31.7 percent) and Port St. Lucie, FL (up 29.8 percent).
The largest annual increases in metro areas with a population of at least 1 million in the second quarter of 2022 were in Tampa, FL (up 29.3 percent); Orlando, FL (up 25.5 percent); Phoenix, AZ (up 25.3 percent); Nashville, TN (up 24.3 percent) and Charlotte, NC (up 24.2 percent).
Home prices in the second quarter of 2022 hit or tied all-time highs in 168 percent of the 183 metro areas in the report, including New York, NY; Los Angeles, CA; Chicago, IL; Dallas, TX, and Houston, TX.
The largest annual decreases, or smallest increases, in median prices during the second quarter of 2022 were in Toledo, OH (down 3.4 percent); Davenport, IA (down 2.7 percent); Peoria, IL (down 0.8 percent); Rockford, IL (up 2.1 percent) and Trenton, NJ (up 2.2 percent).
The smallest annual increases in metro areas with a population of at least 1 million in the second quarter of 2022 were in Honolulu, HI (up 4.4 percent); Buffalo, NY (up 5.5 percent); Virginia Beach, VA (up 6.3 percent); Rochester, NY (up 6.7 percent) and Baltimore, MD (up 7.4 percent).