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THE GARDEN ISLAND
Friday, October 27, 2023 • B3
DOWN MARKET?
Years of soaring prices, limited home sale inventory drive profits for sellers
Alex Veiga AP BUSINESS WRITER
LOS ANGELES — Despite a housing slump going back more than a year, soaring home prices in recent years and a stubborn shortage of properties on the market are helping to drive solid profit gains for sellers. The profit margin on median-priced single-family homes and condos nationally soared to 59 percent in the July-September quarter, according to a report released Thursday by real estate information provider Attom. The profit margin in a home sale represents the percent difference between the original purchase price and what it was sold for. “Prices and profits around the U.S. got another boost over the summer as the housing market continued recovering from last year’s setbacks,” said Attom CEO Rob Barber. The third quarter increase followed profit margin gains of 56.6 percent in the April-June period and 55.2 percent in the January-March quarter. Even so, home sellers in the third quarter didn’t fare as well as in the same quarter last year, when the profit margin on a median-priced home was 62 percent, just below the alltime high on records going
Prices and profits around the U.S. got another boost over the summer as the housing market continued recovering from last year’s setbacks.” Rob Barber Attom CEO
—— they sell now. And the longer they owned their home, the more the potential profit margin. Homeowners who sold in the third quarter had owned their homes an avDAMIAN DOVARGANES / ASSOCIATED PRESS erage of 7.86 years, which marked the second highest A home for sale is shown in Los Angeles on Thursday, Oct. 19, 2023. The profit margin on median-priced point since 2000, accordsingle-family homes and condos nationally soared to 59 percent in the July-September 2023 quarter, acing to Attom. cording to a report released by real estate information provider Attom on Thursday, Oct. 19, 2023. Still, when looking only at seller gross profits — back to 2008. costs have discouraged The nationwide median borrow. That led to bidHome prices have remany homeowners who home price rose 2 percent ding wars and homebuyers not the profit margin — their gains are bit more locked in rates around 3 paying sometimes hunin the third quarter to an mained resilient even as percent just two years ago all-time high $350,000, acthe housing market has dreds of thousands of dol- modest. The median U.S. home sale gross profit in from selling now, limiting slowed sharply under the cording to Attom’s data. lars above the seller’s the third quarter was the already near historweight of surging mortBy some measures, asking price. home prices soared more Many homeowners who $129,900, a 3.2 percent gage rates, which have ic-low level of homes on gain compared with the than 40 percent during the bought their home before held above 7 percent since the market. That, in turn, this superheated period in same quarter last year and August, crushing homehas stoked competition for pandemic as mortgage rates hit rock bottom, exthe market, are in the posi- a 5 percent improvement buyers’ purchasing power. fewer homes, keeping since the second quarter, prices from falling signifiThe sharply higher panding how much home- tion to potentially reap a home loan borrowing hefty profit margin should Attom found. cantly. buyers could afford to
Long-term mortgage rate rises for the 7th straight week ASSOCIATED PRESS NEW YORK — The average rate on the benchmark 30-year home loan rose for the seventh straight week, creating an increasingly high bar to home ownership for Americans. The rate on the 30-year fixed mortgage is at 7.79 percent, up from 7.63 percent last week, Freddie Mac said Thursday. A year ago the rate was 7.08 percent. As mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in far low rates two years ago, when they were around 3 percent, from selling. The national median mortgage payment was $2,155 in September, up 11 percent, or $214, from a year ago, according to the Mortgage Bankers Association. Sales of previously occupied U.S. homes in September fell for the fourth month in a row, grinding to their slowest pace in more than a decade. The rate on the 15-year loan rose to 7.03 percent from 6.92 percent. A year ago the rate on the loan, which is popular with homeowners their home loan, was at 6.36 percent. “Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory,” said Freddie Mac chief economist Sam Khater.