Seller Profit Margins Fall for Second Year in a Row

ATTOM Data's Year End 2024 Home Sales Report found that home sellers made a $122,500 profit on typical sales in 2024, a return on investment of 53.8%. Although both numbers soared to near-record levels, the profit margin for median-priced home sales nationwide receded from 56.9% to 53.8%. This decline in profit margin marked the second annual decrease, a pattern that has not been seen since the aftermath of the great recession of the late 2000s. Even though gross profit on median single-family homes and condo sales rose by about $2,000 from 2023, the margins within those gross profits took a relatively steep cut: 8% below a peak from 2022, according to the report. "(T)he U.S. housing market mostly rebounded nicely in 2024," said Rob Barber, ATTOM CEO. "Prices went back up at a healthy clip, and homeowners continued to make some of the best profits on sales in the past 25 years. The renewed shine, however, didn't come without a bit of tarnish as margins took another turn for the worse. Amid the generally good news, that's something worth following closely in 2025." ATTOM's data also showed that the median national home price rose 5% to a record $350,000 marker. ATTOM measured return on investment for 127 metropolitan statistical areas with a population north of 200,000 and sufficient sales data, finding that the country's Northeast, South, and Western regions had nearly all of the highest ROI metros, with 29 out of 30. San Jose, California, led the way with a 105.8% return on investment. This was followed by Knoxville, Tennessee (94.3%), Ocala, Florida (87.1%), Seattle, Washington (85.6%) and Scranton, Pennsylvania (85%). The Midwest and Northeast were home to metros with the most significant increases in profit margin from 2023 to 2024, with Syracuse and Rochester, New York, seeing seller margins rise by double digits (13.3% and 10.4%, respectively). Industry analysts have recently identified Rochester as a "hot" housing market in recent years. It has also been highly rated for its affordability compared to the rest of the country. On the other side of the profitability coin was the Southern region of the U.S., which contained the 10 most significant decreases in investment. This was led by Fayetteville, Arkansas, which experienced a decline in ROI from 71.9% to 51.3% yearly. This was followed by Ocala, Florida (105.7% to 87.1%), Sarasota, Florida (80.6% to 64.6%), Chattanooga, Tennessee (80.6% to 65.9%), and Crestview-Fort Walton Beach, Florida (60.1% to 45.9%). ATTOM found that profit margins on typical home sales declined from 2023 to 2024 in 73% of the 127 metros with sufficient data to analyze for investment returns, or 93 of such metros expressed as a raw number. According to Barber, Home prices are stretching household budgets more and more, and mortgage rates have been increasing in recent months even as other forces put more upward pressure on prices. So, significant factors undoubtedly could propel the market up or settle it back down. Either will have a substantial effect on seller returns.”