Property data curator ATTOM released its third quarter 2024 U.S. Home Sales Report, revealing that homeowners earned a 55.6 percent profit margin on typical single-family home and condo sales nationwide during the third quarter.
This figure marked a small decline both quarterly and annually, down by 1 percentage point from the second quarter and 2 points from the third quarter of 2023.
The slight dip in profit margins came as the home-price spikes that buoyed the market in the spring leveled off, leaving the U.S. median home value nearly unchanged at about $360,000. While home-seller profits remain historically high, the national margin has gradually decreased each quarter from its peak of 64 percent in 2022.
Despite the cooling market, typical raw profits for homesellers remained near record levels, with the median raw profit holding steady at just under $130,000.
“The latest price and profit numbers offered another round of generally good news for homeowners, tempered by a modest downside,” Rob Barber, CEO of ATTOM, said in a release. “Home values stayed at or near record levels across large parts of the country, keeping seller profits well above historical norms. However, the market slowed after a strong second quarter, continuing a gradual decline in profit margins that began last year.”
Barber added, “This is far from a signal that the long market boom is ending. However, forces remain in play that could shift in either direction, especially as affordability challenges persist for many potential buyers.”
Profit margins — calculated as the percentage difference between median purchase and resale prices — remained flat or decreased from the second to third quarter of 2024 in 79 (50.6 percent) of the 156 metropolitan statistical areas (MSAs) analyzed. Margins declined annually in 112 (71.8 percent) of those metros, following a similar pattern from the peak median home sale return of 64.3 percent in the second quarter of 2022.
The downturn has affected all price segments, from MSAs where home values are below $250,000 to those above $450,000. However, the more affordable markets have been less impacted, with margins falling in about 60 percent of the least expensive metro areas compared wityh 75 percent in higher-end markets.
Significant year-over-year drops in profit margins occurred in the following metro areas:
- San Francisco, Calif.: 84.9 percent to 61.4 percent
- Punta Gorda, Fla.: 94.1 percent to 74.4 percent
- Scranton, Pa.: 88.2 percent to 69.6 percent
- South Bend, Ind.: 77.3 percent to 59.2 percent
- Hilo, Hawaii: 86.5 percent to 70.5 percent
Among metro areas with populations over 1 million, the largest annual declines were seen in:
- Austin, Texas: 44.3 percent to 33.3 percent
- Honolulu, Hawaii: 53.9 percent to 43.3 percent
- Riverside, Calif.: 78.6 percent to 69 percent
- Birmingham, Ala.: 52.1 percent to 42.7 percent
Not all regions experienced declines. The biggest year-over-year gains in profit margins were recorded in:
- Trenton, N.J.: 65.5 percent to 87.4 percent
- Albany, N.Y.: 31.8 percent to 51.6 percent
- Rockford, Ill.: 54.5 percent to 70.2 percent
- Rochester, N.Y.: 66.7 percent to 81.2 percent
- Evansville, Ind.: 47.2 percent to 61.7 percent
The full report can be found here.