Home prices & profits rise across the U.S.

The third quarter of 2023 saw a rise in home prices and profits across the U.S., despite an uncertain economic landscape.

The average profit margin on median-priced single-family home and condo sales hit 59%. That’s up from 56.6% in Q2 2023, according to new data from ATTOM’s U.S. Home Sales Report for Q3 2023.

The rebound of the U.S. housing market has pushed the median nationwide home price up to a new high of $350,000. This contrasts with the trend in 2022-2023, which was perceived as a reverse of the decade-long market boom.

Gross profits on typical single-family home and condo sales increased 5% quarterly to $129,900 and were up 3.2% annually.

The uptick was attributed to historically low supply,consumer-price inflation, stock market declines, and a rising unemployment rate.

Typical profit margins increased from Q2 to Q3 2023 in 85 of 155 metro areas with sufficient data. They remained down annually in 103 (66%) metros.

The biggest quarterly profit-margin increases in metros of least 1 million were:

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

The biggest quarterly profit-margin decreases for metros of least 1 million in population were:

• San Jose, CA: -7.3% (from 105.4% to 98.1%)
• Fresno, CA: -6.3% (from 77.1% to 70.8%)
• Raleigh, NC: -5.6% (from 61.9% to 56.3%)
• San Diego, CA: -4.9% (from 78.7% to 73.8%)
• Austin, TX: -4.8% (from 50.3% to 45.5%)

Median home and condo prices increased in 110 (71%) of the 155 metro areas analyzed in Q3 2023. Additionally, prices rose annually in 125 of those areas (81%).

Nationwide, the median home price reached a new high of $350,000. This marks a 2% increase from the previous record of $343,000 in Q2 2023. It’s also up 6.1% from $329,900 in Q3 2022.

Metro areas with the biggest increases in median home prices from Q2 2023 to Q3 2023 were:

• Buffalo, NY: +14.7%
• Scranton, PA: +11.4%
• Trenton, NJ: +11.1%
• New York, NY: +9.9%
• Syracuse, NY: +9.8%

Home prices reached new highs in 86 out of 155 metro areas (55%) during the third quarter of 2023. Metro areas with a population of over 1 million that set or tied records during this period include:

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

Metro areas with a population of at least 1 million experienced the largest decline in median home prices from Q2 to Q3 2023:

• New Orleans, LA: -5.2%
• Indianapolis, IN: -4.6%
• San Francisco, CA: -4.4%
• Austin, TX: -4%
• Dallas, TX: -3%

In Q3 2023, all-cash purchases made up 36.6% of single-family home and condo sales nationwide. That’s a slight increase from 36.4% in Q2 2023 and up from 35.2% in the same quarter last year.

Institutional investors across the country accounted for 5.9% (1 in every 17) of single-family home and condo purchases. This is down from 6.2% in Q2 2023 and 7.6% in Q3 2022, reaching the lowest level since Q4 2020.