Home sales see shrinking profits as prices fall in most of the US
Profit margins on typical home sales nationwide shrank to a two-year low in the first quarter, according toMargins narrowed to 44.2% from 48.7% in the prior quarter as most of the country saw declines in home prices. It marked the third consecutive quarterly decrease and a continued drop from a peak of 56.1% in the second quarter of last year.
"Homeowners are starting to take a significant hit in the form of lost profits from the recent market slowdown," ATTOM CEO Rob Barber said in a statement."Nine months of varying price declines around the country have carved away almost a quarter of the profit margin sellers were enjoying in early 2022. That's aThe national median home price rose 1% quarter-over-quarter to $321,135, ATTOM reported, although home values tumbled in three-quarters of major US housing markets.
Since peaking in the second quarter of 2022, the median home price has fallen 7%, dragging down margins as well, ATTOM said. That came as the past year has seen mortgage rates more than double, a spike in inflation, and a stock market sell-off. "Those forces cut into what prospective home buyers could afford, helping to tamp down demand and lower prices despite short supplies of properties for sale," ATTOM said.
As the Federal Reserve pushed an aggressive monetary policy tightening campaign over the last year, mortgage rates at one point hovered above 7%, and the housing market"It is possible that the upcoming peak buying season of 2023 could lead to increased profits, owing to favorable mortgage rates and other factors," Barber said.
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