Profit margins on median-priced single-family home and condo sales declined to 55.3% in the first quarter of this year, according to new data from ATTOM. This is down from 57.1% in the previous quarter and from 56.5% one year earlier, and it represents the smallest level since mid-2021.
Among the major metro areas, the biggest year-over-year decreases in typical profit margins came in Lake Havasu City, Arizona (margin down from 102.4% in the first quarter of 2023 to 76.3 percent in the first quarter of 2024); Naples, Florida (down from 88.4% to 62.9%); Hilo, Hawaii (down from 82.3% to 57.8%); Crestview-Fort Walton Beach, Florida (down from 68% to 47.3%) and Port St. Lucie, Florida (down from 92.8% to 72.3%).
ATTOM noted the decline coincided with the 4.3% drop in the median nationwide home price to $330,000.
“The latest price and profit numbers show notably downward trends, which raises new questions about whether the housing-market boom is indeed ebbing, or even ending, after so many years of improvement,” said Rob Barber, CEO for ATTOM. “But due caution is needed in looking at the first-quarter data and what the patterns mean. We saw a similar downward pattern from late 2022 into early 2023, and then the market surged. Plus, profits and profit margins still are very high by historical measures. Amid all that, the Spring buying season will be a huge barometer for whether the market still has steam in its engine.”
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