BAM Key Details:

  • Home seller profits increased from 56.6% in Q2 to 59% in Q3 according to ATTOM’s third quarter 2023 U.S. Home Sales Report, showing the second consecutive quarterly uptick after several declines. Profit margins are down year over year. 
  • Homeownership tenure is up and near a high point for this century. 
  • Lender-owned foreclosures remain near the low point since 2000

ATTOM just released its Q3 2023 U.S. Home Sales Report, showing a quarterly increase in home seller profits as home values reach new highs. 

Profit margins on sales of single-family homes and condos rose from 56.6% in Q2 to 59% in Q3 as the national median home price rose 2% to a new high of $350,000. Both seller profits and home prices have increased after an unusual downturn from mid–2022 to early 2023. 

Yet even as seller profits improve on a quarterly basis, the typical seller return fell below the 62% level from the third quarter of 2022, as well as the 62.3% peak reached in Q2 of last year.

Prices and profits around the U.S. got another boost over the Summer as the housing market continued recovering from last year’s setbacks. Things do remain uncertain heading into the market’s annual Fall slowdown, especially at a time when mortgage rates are rising again, home affordability is getting tougher and the potential for a recession hangs in the air. But the latest gains fell in line with what we often see during the third quarter and showed that any predictions of an extended market fallback may have been premature.

Rob Barber

ATTOM CEO

Historically low inventory drives up prices and profits

Gross profits on typical single-family home and condo sales across the U.S. rose 5% from the previous quarter to $129,000 and were also up 3.2% year over year. 

Both measures increased over the summer as housing supply remained historically low, driving up both home values and, by extension, seller profits. 

That said, mortgage rates also started to climb again in the third quarter, hitting 8% for a 30-year fixed loan this week. 

Consumer-price inflation also rose after falling dramatically over the past year from 9% to 3%, while stock values declined and the national unemployment rate climbed close to 4%. 

Profit margins are up from last quarter but down year over year

Typical profit margins rose from Q2 to Q3 in 85 or 55% of the 155 U.S. metros with sufficient data to analyze. But they were still down year over year in 103 (66%) of those metros as recent upticks were not enough to outsize earlier losses. 

Profit margins grew as third-quarter growth in home prices outpaced smaller increases recent sellers had been paying when they originally purchased their homes. 

Metro areas were included in the study if they had a sufficiently large population and a minimum of 1,000 single-family home and condo sales in Q3 2023. 

The biggest quarterly improvements in typical seller profit margins came in the following U.S. metro areas: 

  • Scranton, PA (up from 72.2% in Q2 2023 to 92% in Q3 2023)
  • Reading, PA (up from 70.3% to 88.5%)
  • Flint, MI (up from 66.7% to 84.6%) 
  • Evansville, IN (up from 32.9% to 45.9%) 
  • Roanoke, VA (up from 44.4% to 56.3%)

Among metros with populations of at least one million, the biggest quarterly profit-margin increases were in— 

  • Birmingham, AL (return up from 41.2% to 50.9%)
  • Buffalo, NY (up from 73.9% to 82.9%) 
  • Rochester, NY (up from 65.4% to 71.9%)
  • Kansas City, MO (up from 44.5% to 50.2%)
  • Tucson, AZ (up from 59.1% to 64.8%)

Typical profit margins fell on a quarterly basis in 70 (45%) of the 155 metros in ATTOM’s analysis. The biggest quarterly drops were in— 

  • Lake Havasu City, AZ (margin down from 101.7% in Q2 2023 to 81.6% in Q3 2023)
  • Albany, NY (down from 44.8% to 27.4%)
  • Naples, FL (down from 84.5% to 73.7%)
  • Bakersfield, CA (down from 76.1% to 65.9%)
  • Tallahassee, FL (down from 73.8% to 63.6%)

Among metros with populations of at least one million, the biggest quarterly drops in profit margins were in— 

  • San Jose, CA (down from 105.4% to 98.1%)
  • Fresno, CA (down from 77.1% to 70.8%)
  • Raleigh, NC (down from 61.9% to 56.3%) 
  • San Diego, CA (down from 78.7% to 73.8%)
  • Austin, TX (down from 50.3% to 45.5%)

Metros with populations of at least one million where typical seller profits remained down the most year over year:  

  • Austin, TX (margin down from 68.8% in Q3 2022 to 45.5% in Q3 2023)
  • Honolulu, HI (down from 69.9% to 50.6%)
  • Phoenix, AZ (down from 80% to 61.9%)
  • Raleigh, NC (down from 73.9% to 56.3%)
  • Nashville, TN (down from 84% to 68%)

Raw profits are up in nearly two-thirds of the U.S.

Profits on median-priced home sales nationwide, in raw U.S. dollars, rose from $123,716 in Q2 2023 to $129,900 in Q3—a 5% increase. Typical raw profits rose on a quarterly basis in 95 or 61% of the 155 metros in ATTOM’s study.

Measured annually, the typical raw profit nationwide also rose, by 3.2%, from $125,875 in Q3 2022. That figure increased year over year in 54% of the metros analyzed. 

Among metros with populations of at least one million, the biggest quarterly raw profit increases were in— 

  • Buffalo, NY (up 22%)
  • New York, NY (up 15%) 
  • Birmingham, AL (up 13%) 
  • Rochester, NY (up 13%) 
  • Kansas City, MO (up 11%)

Year over year, the biggest increases in raw profits on median-priced home sales in metros with populations of at least one million were in— 

  • Hartford, CT (up 33%)
  • Rochester, NY (up 24%)
  • Chicago, IL (up 15%)
  • Cincinnati, OH (up 13%)
  • Buffalo, NY (up 13%)

Eighteen of the top 20 largest raw profits on median-priced home sales in Q3 2023 were on the Northeast or West costs, led by— 

  • San Jose, CA (profit of $718,000)
  • San Francisco, CA ($485,000)
  • San Diego, CA ($361,000)
  • Los Angeles, CA ($347,233)
  • Seattle, WA ($331,938).

Nineteen of the smallest 20 raw home sale profits were in the Midwest or South, with the lowest in— 

  • Shreveport, LA ($2,744)
  • Beaumont, TX ($24,312)
  • Peoria, IL ($37,500)
  • Lubbock, TX ($44,725)
  • McAllen, TX ($47,030)

Home prices are up in almost three-quarters of the U.S.

Home prices rose from the second quarter to the third in 110 (71%) of the 155 U.S. metros with enough data to analyze. They increased year over year in 125 (81%) of those metros. 

The median national home price rose to a new high of $350,000—up 2% from the previous record of $343,000 in Q2 2023 and up 6.1% from $329,000 in Q3 2022. 

Metros with the biggest quarterly increases in median home prices were led by— 

  • Buffalo, NY (up 14.7%)
  • Scranton, PA (up 11.4%)
  • Trenton, NJ (up 11.1%)
  • New York, NY (up 9.9%) 
  • Syracuse, NY (up 9.8%)

Among metros with populations of at least one million, the biggest quarterly increases in median home prices were in— 

  • Buffalo, NY (up 14.7%)
  • New York, NY (up 9.9%) 
  • Detroit, MI (up 7.8%)
  • Hartford, CT (up 6.3%)
  • Philadelphia, PA (up 6.3%)

Home prices tied or reached new highs during Q3 2023 in 86 (55%) of the 155 metros in ATTOM’s study. Among those with populations of at least one million, those that set or tied records in Q3 included— 

  • New York, NY
  • Chicago, IL
  • Philadelphia, PA
  • Miami, FL
  • Atlanta, GA

Among metros with populations of one million or more, those with the biggest quarterly declines in median home prices were— 

  • New Orleans, LA (down 5.2%)
  • Indianapolis, IN, (down 4.6%)
  • San Francisco, CA (down 4.4%)
  • Austin, TX (down 4.0%) 
  • Dallas, TX (down 3.0%)
ATTOM-US-Historical-Median-Sale-Prices-Q3-2023-chart

Source: ATTOM

Homeownership tenure rises to the second-highest point for this century

Homeownership tenure for sellers in Q3 2023 climbed to an average of 7.86 years, marking the second-highest since 2000. That figure is up from the previous quarter’s 7.6-year average and from 7.21 years in Q3 2022. 

Average tenure was up year over year in 96% of the metros with sufficient data to analyze. The steepest annual increases were in— 

  • Santa Barbara, CA (tenure up 32%) 
  • Madera, CA (up 27%) 
  • Santa Rosa, CA (up 27%)
  • Truckee, CA (up 24%)
  • Santa Cruz, CA (up 21%)

The top 40 longest average homeownership tenures among sellers in Q3 2023 were in the Northeast and West, led by— 

  • Barnstable, MA (13.84 years)
  • Bridgeport, CT (12.79 years)
  • Norwich, CT (12.59 years)
  • Santa Rosa, CA (12.58 years)
  • Boston, MA (12.56 years)

The shortest average tenures among Q3 sellers were in— 

  • Provo, UT (6.44 years)
  • Austin, TX (6.46 years)
  • Crestview-Fort Walton Beach, FL (6.47 years)
  • Oklahoma City, OK (6.57 years)
  • Lakeland, FL (6.57 years)
ATTOM-Average-homeownership-tenure-chart

Source: ATTOM

Lender-owned foreclosures stay near low point since 2000

Home sales following foreclosures by lending institutions represented only 1.4% or one of every 73 single-family home and condo sales in Q3 2023. That’s down 1.5% from the previous quarter, but it’s up year over year from 1.1% in Q3 2022. 

It’s still a tiny subset of U.S. home sales—and a far cry from the 30% peak it reached in early 2009 during the fallout from the Great Recession of 2007. 

Among U.S. metros with sufficient data, those metros where REO sales accounted for the largest shares of all home sales in Q3 2023 were— 

  • Flint, MI (6.2%)
  • Macon, GA (5.8%)
  • Hilo, HI (4.1%)
  • Lansing, MI (3.4%)
  • Chicago, IL (3.3%)

Cash sales are on the rise

Nationwide, all-cash home purchases represented 36.6% of all single-family home and condo sales in Q3 2023—a slight increase from 36.4% the previous quarter and up from 35.2% in the third quarter of 2022. 

The level of cash sales has inched up over the past year as mortgage rates in the U.S. have continued their march higher, now close to an average of 8 percent for a 30-year loan. If rates keep rising, that should continue creating favorable conditions for more all-cash deals.

Rob Barber

ATTOM CEO

Among U.S. metros with sufficient cash-sales data and populations of at least 200,000, those metros where cash sales accounted for the largest share of home sales in Q3 2023 were— 

  • Athens, GA (63.3%)
  • Myrtle Beach, SC (60%)
  • Macon, GA (58.9%)
  • Claremont, NH (56.8%)
  • Naples, FL (56%)

Metros were cash sales accounted for the smallest share of home sale transactions in Q3 2023:

  • Greeley, CO (16.3%)
  • Boulder, CO (19.7%)
  • Cedar Rapids, IA (21.6%)
  • Washington, DC (21.7%)
  • Vallejo, CA (21.7%)

Institutional investment hits three-year low

Nationwide, institutional investors made 5.9% of all single-family and condo purchases—or one of every 17—in Q3 2023. That figure was down from 6.2% in Q2 2023 and from 7.6% in Q3 2022, hitting the lowest point since Q4 2020. 

Among states with sufficient data on institutional investment, those with the largest percentages of home sales to institutional investors in Q3 of 2023 were— 

  • Oklahoma (8.8% of all sales)
  • Tennessee (8.7%)
  • Texas (8.4%)
  • Georgia (8%)
  • Indiana (7.9%)

States with the lowest percentages of sales to institutional investors in Q3 2023:

  • Hawaii (1.9% of all sales)
  • Rhode Island 2.9%)
  • Maine (3%)
  • New Hampshire (3%)
  • Louisiana (3.2%)
ATTOM-Historical-home-sales-by-type-chart

Source: ATTOM

FHA-financed home purchases are down quarterly but up annually

Nationwide, homebuyers using Federal Housing Administration (FHA) loans to buy a home accounted for 8.8% of all single-family home purchases in Q3 2023—or one of every 11 home purchases. That figure was down from the previous quarter’s 9.3% but still up from 8% one year ago. 

Among metros with sufficient FHA-buyer data, those with the highest percentages of sales to FHA homebuyers in Q3 2023 were— 

  • Merced, CA (25.3% of all sales)
  • Lakeland, FL (24.3%)
  • Bakersfield, CA (22.9%)
  • Yuma, AZ (20.5%)
  • Visalia, CA (20.1%)

Read the full report for more details, including methodology. 

Takeaways for real estate agents

The increase in home seller profits is good news for those who need or want to sell as soon as possible. As their guide through the home selling process, be ready with the data they need to price their homes at the sweet spot to attract buyers and improve their chance at multiple offers. 

Buyers also need to be aware of this data when making offers on available properties in their area. 

And for those planning to sell (or thinking about it) who can buy their home in cash, use this script to help them make the most of their advantage in this market.