Profit margins on median-priced single-family home and condo sales reached a record 55.5 percent in the second quarter following the largest quarterly gain in a decade. That’s according to ATTOM’s second-quarter home sales report.
The profit margin was up from 48.3 percent in the first quarter, 42.9 percent year-over-year and 32 percent from the second quarter of 2020.
“Homesellers in the second quarter continued to benefit from the rapid growth in home price appreciation the country has experienced over the past few years,” ATTOM Executive Vice President of Market Intelligence Rick Sharga said in a release. “While price growth may slow down as higher mortgage rates dampen demand from prospective homebuyers, homesellers should continue to profit from the record $27 trillion in homeowner equity in today’s market.”
The second-quarter profit margin spike of more than 7 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. The typical single-family home and condo sale generated a gross second-quarter profit of $123,869, up 19 percent from $103,750 in the first quarter and up 38 percent from $90,000 a year earlier.
The national median home price hit a new high of $346,000 in the second quarter, the 10th straight quarterly increase and up 8.8 percent from the first quarter and 15.3 percent year-over-year.
Profit margins increased from the first to second quarter in 89 percent of the metro areas analyzed by ATTOM. They were up annually in 95 percent.
The biggest annual increases in profit margins were in Fort Myers, Fla. (47.1 percent to 90.9); Naples, Fla. (40.4 percent to 83.1 percent); Ocala, Fla. (44.4 percent to 85.2 percent); Gulfport, Miss. (a loss of 6.5 percent to a gain of 30.8 percent) and Yuma, Ariz. (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 were in Orlando, Fla. (36.4 percent to 67.6 percent); Tampa, Fla. (47.4 percent to 76.3 percent); Miami (38.9 percent to 66.8 percent); Cleveland (21.4 percent to 42.1 percent) and Jacksonville, Fla. (43.4 percent to 63.4 percent).
Profit margins decreased quarterly 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, Ore. (87.5 percent to 55 percent); Hilo, Hawaii (140.8 percent to 110.5 percent); Boise, Idaho (122.8 percent to 100.1 percent); Salisbury, Md. (57.1 percent to 48.6 percent) and Albany, N.Y. (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 (48.9 percent to 42.8 percent); Sacramento, Calif. (61.5 percent to 62.5 percent); San Francisco (81.5 percent to 83.1 percent); Washington, D.C. (44.9 percent to 46.7 percent) and Boston (49.8 to 52.9 percent).
Median home prices in the second quarter exceeded values from the prior quarter in 96 percent of the metro areas ATTOM analyzed and were up annually in 96 percent. Nationally, the median price of $346,000 in the second quarter was up from $318,000 in the first quarter and $300,000 in the second quarter of last year.
The biggest annual increases in median home prices were in Gulfport, Miss. (up 55.3 percent); Naples, Fla. (up 36 percent); Lakeland, Fla. (up 35.7 percent); Fort Myers, Fla. (up 31.7 percent) and Port St. Lucie, Fla. (up 29.8 percent).
The largest annual increases in metro areas with a population of at least 1 million were in Tampa, Fla. (up 29.3 percent); Orlando, Fla. (up 25.5 percent); Phoenix (up 25.3 percent); Nashville, Tenn. (up 24.3 percent) and Charlotte, N.C. (up 24.2 percent).
The largest annual decreases, or smallest increases, in median prices during the second quarter were in Toledo, Ohio (down 3.4 percent); Davenport, Iowa (down 2.7 percent); Peoria, Ill. (down 0.8 percent); Rockford, Ill. (up 2.1 percent) and Trenton, N.J. (up 2.2 percent).
The smallest annual increases in metro areas with a population of at least 1 million were in Honolulu (up 4.4 percent); Buffalo, N.Y. (up 5.5 percent); Virginia Beach, Va. (up 6.3 percent); Rochester, N.Y. (up 6.7 percent) and Baltimore (up 7.4 percent).