Homeowners made an average profit margin of 50.2% selling single-family homes and condominiums during the first quarter of this year, according to Attom, a property data and real estate analytics company.
The average profit was down 3.2% from the previous quarter and was a decrease of 4.8% from the first quarter of 2024. Attom reports that the national median profit margin for home sales has declined almost every quarter since the summer of 2022, but still remains well above pre-pandemic levels.
The national median home sale price, which peaked at $358,000 in the third quarter of 2024, has held steady for the past two quarters at $355,000, according to Attom.
“Sellers may not be enjoying quite the same windfall they were a few years ago, but by historical standards profits are strong, both in terms of margins and raw dollar value,” said Rob Barber, CEO for Attom. “The first quarter also tends to be the weakest of the year, so don’t be surprised to see profits regain ground during the summer months.”
Barber said the dip in profits has affected homes across the price spectrum and throughout the nation, but several communities in Florida and California saw the biggest profit margin drops.
The biggest year-over-year decrease in profit margins during the first quarter was experienced in Punta Gorda, Fla., where margins fell from 106.3% to 69.2%. Next was Ocala, Fla., where margins fell from 99.9% to 66.7%; followed by Deltona, Fla., where margins were down from 81.6% to 54%; and Bakersfield, Calif., where margins cratered from 81.1% to 58.9%.
Some cities that saw improvements to profit margins included Toledo, Ohio; Birmingham, Ala.; and Canton, Ohio.
Despite the nationwide profit-margin shrinkage, home sellers are still seeing comparatively high returns. Attom reports that of the 128 metro areas that were part of their analysis, 77, or 60%, saw typical sales profit margins of at or above 50%. Metro areas with at least 1 million residents that had the highest typical profit margins were led by San Jose, Calif., with 88.8%. It was followed by Buffalo, N.Y, at 82.2%; Seattle at 75.3%; Providence, R.I., at 74.1%; and Boston at 73.9%.
Large metro areas with the lowest typical profit margins are New Orleans; San Antonio; Dallas; Austin, Texas; and Houston.
