Profit margins on median-priced single-family home and condo sales during the third quarter jumped to 47.6 percent, the highest level since the end of the Great Recession a decade ago, according to ATTOM’s 2021 U.S. Home Sales Report.
According to the report, the typical home sale across the country during the third quarter generated a profit of $100,178, up from $88,800 in the second quarter and from $69,000 a year ago. The national median home price hit a record $310,500 in the third quarter.
In the third quarter, median home prices rose annually in 93 percent of metro areas analyzed, while profit margins increased in 86 percent of them.
“The third quarter of this year marked another period in a banner year for a housing market boom that’s steaming ahead through its 10th year. Prices and seller profits again hit new highs since the market started coming back from the Great Recession in 2012,” ATTOM Chief Product Officer Todd Teta said in a release. “There have been a couple of small hints of a possible slowdown in recent months, as we head into the normally quiet fall and winter seasons. The pandemic also remains a constant presence that could tamp things down. But, for now, the market engine seems to have nothing but high-octane gas in the tank.”
Typical profit margins rose year-over-year in 175 (86 percent) of 204 metro areas analyzed, according to the report. Margins also increased from the second to third quarter in 168 of the 204 metros (82 percent).
The biggest year-over-year increases in profit margins came in Boise City, Idaho (up from 61.4 percent in third quarter 2020 to 130.3 percent in third quarter 2021); Claremont-Lebanon, N.H. (up from 41.1 percent to 93.8 percent); Augusta, Ga., (up from 19.6 percent to 56.6 percent); Raleigh, N.C. (up from 30.4 percent to 67 percent) and Bellingham, Wash. (up from 69.5 percent to 105.6 percent).
Profit margins stayed the same or dropped year-over-year in 29 of the 204 metro areas analyzed (14 percent) while they declined quarterly in 36 (18 percent). The biggest annual decreases were in Salem, Ore. (from 75.6 percent in third quarter 2020 to 48.3 percent in third quarter 2021); Brownsville, Texas (down from 37.1 percent to 13 percent); Kansas City, Mo. (down from 43.6 percent to 25.1 percent); San Jose, Calif. (down from 86.2 percent to 71 percent) and McAllen, Texas (down from 33.4 percent to 19.9 percent).
The West continued to have the largest profit margins on typical home sales, with eight of the top 10 returns on investment in the third quarter from among the 204 metro areas analyzed. They were led by Boise City, Idaho (130.3 percent return); Bellingham, Wash. (105.6 percent); Claremont-Lebanon, N.H. (93.8 percent); Spokane, Wash. (87.7 percent) and Prescott, Ariz. (84.7 percent).
Eleven of the 15 smallest margins were in the South. The lowest were in Shreveport, La. (2 percent); Gulfport, Miss. (7.4 percent); Columbus, Ga. (9.9 percent); Atlantic City, N.J. (12.4 percent) and Brownsville, Texas (13 percent).
The biggest year-over-year increases in median home prices in third quarter came in Worcester, Mass. (up 42.9 percent); Barnstable, Maine (up 32.5 percent); Boston (up 28.4 percent); Boise, Idaho (up 28.3 percent) and Lakeland, Fla. (up 27.8 percent). The largest year-over-year decreases were in Brownsville, Texas (down 11.9 percent); Pittsburgh (down 10.1 percent); Gulfport, Miss. (down 8.8 percent); Santa Maria, Calif. (down 7 percent) and Charleston, S.C. (down 4.9 percent).