Home Sellers’ Profit Margins Fell in 2024 Despite Record-High Prices | Global News Avenue

Even though home sellers saw less profit last year price That’s a record high, according to real estate data firm ATTOM.

ATTOM says the typical sales profit for a home seller in 2024 is $122,500. Return on investment was 53.8%, down from 56.9% the previous year. While this is the second consecutive year profit margins have fallen, it’s only 8 percentage points below the peak reached in 2022.

Home sales prices hit record high

One of the factors keeping sellers’ profit margins high is record-breaking home prices.

The median sales price rose 4.9% to a record $350,000, surpassing last year’s modest growth. However, ATOM says this is not enough to offset the high initial cost homeowners pay for their homes.

“Profit margins have retreated as gains in home values ​​have failed to keep pace with recent increases in the prices sellers initially paid to purchase their homes,” the report said.

Sales prices have strengthened this year as the housing market remains under pressure. Scarce inventory and high mortgage interest rate Providing options to homebuyers increases the demand for homes on the market.

Home sellers benefit from tight housing market

many The owners are all staying their current properties because their mortgage rates are much lower than those currently being offered. This creates a so-called “Lock-in” effectreducing the number of listings and making home ownership more expensive. High borrowing costs It also restricted the construction of new properties, further tightening supply.

Reports suggest that while buyers are frustrated, the phenomenon can be lucrative for sellers willing to trade at borrowing costs.

“This is what happened last year as buyers competed for a historically tight housing supply as wages rose, the investment market strengthened and mortgage rates mostly fell,” the report said.