Home seller profits hit highest levels since at least 2005

Home seller profits skyrocketed in 2020, reaching levels not seen in the United States since at least 2005.

That’s according to Attom Data Solutions, which reported that soaring median home prices nationwide helped home sellers realize a profit of $68,843 on the typical sale last year. That’s up from $53,700 in 2019 and $48,500 two years ago. Last year’s raw profit figure translated into a 34.7% return on investment for sellers compared to their original purchase price, up from 29.4% in 2019 and 27.2% in 2018.

That’s the highest average home-seller ROI since 2006, and the ROI improvement of over five percentage points was the largest annual increase since 2017.

“Last year marked a unique year in the history of home prices and profits in the United States,” said Todd Teta, chief product officer at Attom. “A once-in-a-century health crisis tore through much of the nation’s economy but seemed to have the opposite effect on the housing market.

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“Demand remained strong as people who could afford the space and relative safety of single-family homes did just that, aided by super-low mortgage rates and a strong stock market. But they went after a narrowing supply of housing stock, so prices soared and so did seller profits. While it’s unclear how long that will last, in the annals of history, there will be few years recorded as better for sellers and more challenging for buyers.”

Both raw profits and ROI have now improved nationwide for nine consecutive years. Profits rose in more than 90% of housing markets evaluated by Attom, with metros in the West continuing to reap the highest returns on investment. The top 10 metros with the highest ROIs were all west of the Mississippi, ed by San Jose (87.3% ROI); Seattle (72.1%); Salem, Oregon (69.6%); Spokane, Washington (69.2%); and San Francisco (68.2%).

Notably, with owners still reticent to list their homes for sale due to the risk of COVID-19 transmission, homeownership length also hit a recent record, reaching the longest average tenure since at least the first quarter of 2000 — the earliest period of available data for Attom. Tenures hit an average of 8.33 years in the fourth quarter of 2020, up from 7.98 years in the previous quarter and 7.96 years in the fourth quarter of 2019.


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