Home seller profit margins declined in 2025 from record peaks in 2022, but remained well above historical norms and pre-pandemic levels, new data published Thursday shows.
The typical home netted $118,710 in gross profits last year, which translated to a profit margin of 49%, according to a year-end home sales report from real estate analytics firm Attom. Gross profits totaled $124,500, or a profit margin of 55% in 2024.
By comparison, gross profits hit an all-time high of $126,000 in 2022, with sellers earning typical profit margins of 62%. Typical profit margins averaged between negative 1% in 2013 and 31% in 2019 as home values recovered in the wake of the 2008 financial crisis.
“While sellers continued to command record prices, profit margins have been declining for three consecutive years since peaking in 2022, suggesting the market may be gradually normalizing after a period of strong returns,” said Rob Barber, CEO of Attom, in a statement accompanying the report.
Profit margins were lower in more than 87% of major metros with populations exceeding 200,000 people and at least 5,000 home sales in 2025. Meanwhile, gross profits declined in 64.6% of those metro areas.
Nine of the 10 metros where seller profit margins declined the most from 2024 to 2025 were in Florida, while profit margins gains were concentrated in metro areas in midwestern states, including Ohio, Illinois and Indiana.
Among metro areas with populations exceeding 1 million people, sellers raked in the largest gross profits in West Coast hubs, led by San Jose, Calif. ($755,000), San Francisco ($463,500), San Diego ($346,000), Los Angeles ($345,000) and Seattle ($317,869).
The year-end home sales report also highlights that purchase activity by institutional investors, which Attom defines as non-lending entities that purchase at least 10 homes in a calendar year, was flat from 2024 levels at around 6.6% of all home sales last year.
Tennessee and Texas observed particularly high concentrations of institutional investor activity, making up 9.2% of 2025 home sales in those states. Missouri had the next highest purchase share of institutional investors, at 9.1%, followed by Indiana (9%) and Georgia, Alabama and Oklahoma, all at 8.8%.
Metro areas with the highest share of home sales to institutional investors last year were Memphis, Tenn. (14.8%), Huntsville, Ala. (11.9%), Fayetteville, N.C. (11.4%), Birmingham, Ala. (11.2%) and Dallas (11.1%).
All-cash home sales remained roughly level year over year in 2025 at 39.1%, compared to 39% in 2024. Real estate owned (REO), or lender-purchased foreclosure sales declined slightly to 1.4% of all home sales in 2025 compared to 1.3% in 2024.
