Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 46 ■ MECKTIMES.COM
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TUESDAY, NOVEMBER 14, 2023
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U.S. Home-seller profits continue rising as home values hit new highs in third quarter ATTOM has released its third-quarter 2023 U.S. Home Sales Report, which shows that profit margins on medianpriced single-family home and condo sales in the United States increased to 59 percent in the third quarter – the second straight quarterly increase following several declines. The improvement in typical profit margins, from 56.6 percent in the second quarter of 2023, came amid a continued rebound in the U.S. housing market that pushed the median nationwide home price up 2 percent to a new high of $350,000. Both the nationwide profit margin and median home price have increased since an unusual decline from the middle of 2022 to the early part of 2023 that had threatened to reverse a decade-long market boom. However, even as seller fortunes improved again in the third quarter, the typical investment return nationwide did remain below the 62 percent level recorded in the third quarter of 2022 and a high point of 62.3 percent in the second quarter of last year. “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.” Gross profits on typical single-family home and condo sales across the country also went up during the third quarter of 2023. They rose 5 percent quarterly, to $129,900, and were up 3.2 percent annually. The continued gains in profits and prices around the U.S., while representing typical growth for a third-quarter period, still came amid a mix of forces that could turn the market up or down over the coming months. Both measures improved over the Summer as the supply of homes for sale in the U.S. remained historically low. That put upward pressure on prices, which, by extension, helped to push up profits. But mortgage rates started increasing again in the third quarter, rising toward an average of 8 percent for 30-year fixed loan following a stable second quarter. Consumer-price inflation also ticked back up after dropping dramatically over the prior year from 9 percent to 3 percent, while the stock market declined and the national unemployment rate rose close to 4 percent.
Profit margins grow quarterly in roughly half the country but remain down annually
Typical profit margins – the percent difference between median purchase and resale prices – increased from the second quarter of 2023 to the third quarter of 2023 in 85 (55 percent) of the 155 metropolitan statistical areas around the U.S. with sufficient data to analyze. However, they were still down annually in 103, or 66 percent, of those metros as the recent improvements were not enough to wipe out the earlier losses. That happened as the third-quarter improvement in home prices outpaced smaller increases that recent sellers had been paying when they originally bought their homes. Larger gains at the point of resale translated into higher profit margins. Metro areas were included if they had sufficient population and at least 1,000 single-family home and condo sales in the third quarter of 2023. The biggest quarterly increases in typical profit margins came in the metro areas of Scranton, PA (margin up from 72.2 percent in the second quarter of 2023 to 92 percent in the third quarter of 2023); Reading, PA (up from 70.3 percent to 88.5 percent); Flint, MI (up from 66.7 percent to 84.6 percent); Evansville, IN
PLEASE SEE HOME VALUES ON PAGE 3
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