According to ATTOM Data’s year-end 2022 Home Sales Report, the average home seller earned real profit on their sale to the tune of $112,000, up 21% from 2021 and 78% from two years ago.
This news comes despite the recent recession in the housing market that started in the second half of 2022—in fact, profits rose from 2021 to 2022 in 98% of major housing markets.
This figure represents the highest level of homeseller profit since 2008.
The average $112,000 of profit earned by each seller also represents a 51.4% return on investment compared to the buyer's initial purchase price, a number that is up 44.6% from last year and 32.8% in 2020.
“It seems pretty likely that home seller profits peaked for this cycle in 2022,” said Rick Sharga, EVP of Market Intelligence at ATTOM. “Median prices have declined on a monthly basis since mortgage rates doubled between January and October and are likely to decline further in many markets across the country in 2023, reducing profitability for home sellers.”
Both raw profits and return on investment have improved nationwide for 11 straight years, shooting up again in 2022 as the national median home price increased 10% to $330,000—another annual record.
In addition, the median home price increased 10% over the course of 2022, hitting another all-time high of $330,000. The full-year median home-price appreciation in 2022 fell below the 17.6% recorded in 2021. Still, the increase in national median value remains at levels not seen since 2012.
Profit margins on typical home sales improved from 2021 to 2022 in 141 of the 157 metro areas with sufficient data to analyze (90%). That happened as the 10% jump in sale prices nationwide in 2022 surpassed the 5% increases recent sellers had been paying when they originally bought their homes.
Raw profits on median-priced home sales in 2022 topped $100,000 in 79, or 50%, of the 157 metro areas with sufficient data to analyze.
Another statistic monitored by ATTOM found that sellers who sold their home during the fourth quarter of 2022 had owned their homes for an average of 5.85 years, down from 6.05 years during the same period in 2021. The latest figure represented the third-shortest average home-seller tenure since 2012. Average seller tenures were down, year over year by 72%.
According to ATTOM, nationwide, all-cash purchases accounted for 36.1%, or one of every three single-family home and condo sales in 2022. The latest percentage—the highest since 2013—was up from 34.4% in 2021 and from 22.7% in 2020, although still off the 38.5% peaks in 2011 and 2012.
“Cash buyers—many, but not all of whom are investors—are in a position of competitive advantage in today’s higher interest rate environment, and will continue to account for a higher-than-usual share of market at least until mortgage rates dip back down a bit,” Sharga noted. “With affordability a problem for many buyers—especially first-time buyers—it wouldn’t be a surprise to see the percentage of cash purchases actually increase in 2023.”
Foreclosure sales to lenders accounted for just 1.2%, or 1-in-87 single-family home sales in 2022—the lowest level since at least 2005. The 2022 figure was down from 1.5% of sales, or 1-in-68, in 2021 and 3.6%, or 1-in-28, in 2020.
Institutional investors nationwide accounted for 6.5%, or 1-in-15 single-family home and condo sales in 2022 in the U.S. The latest figure was down from 8.1% in 2021, but was still more than twice the 2.9% level in 2020.
The final bit of data on the report found that nationwide, buyers using Federal Housing Administration (FHA) loans accounted for 7.5%, or 1-in-13 single-family home and condo purchases in 2022. That was down from 8.3% in 2021 and from 11.8% in 2020, to the lowest point since 2007.
Click here to view the report in its entirety.