“The second-quarter profit report offers a mixed bag of plusses and minuses that added up to an overall picture of not much change for sellers,” ATTOM chief Rob Barber said in the report. “Prices jumped back upward, which was great news for owners. So did raw profits. Profit margins also remained historically elevated.”
However, Barber explained that the bottom-line profit-margin trend didn’t move much at all because the profit gains did not keep pace with the rapid increase in home prices over the past year.
Geographically, profit margins increased quarterly in 58.8% of the 160 metropolitan statistical areas analyzed but remained down annually in 62.5% of these metros. Higher-priced markets, where home values mostly topped $350,000, saw the most significant year-over-year softening of profit margins.
Despite these trends, returns on investment for median-priced home sales during the second quarter surpassed 50% in 66.3% of the metro areas analyzed. While this represents a decline from the previous year, it remains significantly higher than levels seen five years ago.
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Source: mpamag.com