Second-quarter home sales are generating big profits for home sellers across the nation.
Many home sellers these days are raking it in, having gained, on average, a $75,971 profit on a typical sale in the second quarter of 2020. First-quarter housing profits averaged $65,250, according to a US home sales report from ATTOM Data Solutions.
“The latest figure, based on median purchase and resale prices, marked yet another peak level of raw profits in the United States since the housing market began recovering from the Great Recession in 2012,” the report states.
“The housing market across the United States pulled something of a high-wire act in the second quarter, surging forward despite the encroaching economic headwinds resulting from the Coronavirus pandemic,” says Todd Teta, chief product officer at ATTOM Data Solutions. “No doubt a lot of the ongoing prosperity resulted from gains seen before the pandemic started racing through the country in February and March. Indeed, there have been recent signs of prices flattening out or dropping across significant parts of the country, and the economic toll from the virus continues to be a major issue. But the second-quarter results showed continuing strength in most parts of the nation.”
It was reported that 81 of the 104 metropolitan areas the data analyzed experienced profit margin gain from the second quarter of 2019 to the second quarter of 2020. The largest annual gains were seen in Spokane, WA, Columbus, OH, St. Louis, Chattanooga, TN, and Indianapolis. Rochester, NY and Kansas City, MO, were also prominent in the report.
Homeowners Owning Homes Longer
Homeownership tenure appears to be staying near record highs, despite dropping in several parts of the counrty. Homeowners who sold their homes in the second quarter of 2020 owned their homes an average of 7.95 years, up slightly from 7.85 years in the previous quarter and nearly the same as the peak of 7.96 years in the fourth quarter of 2019.
Cash Purchases Drop
Cash sales hit their lowest point in 13 years, according to the report. Across the nation, all-cash sales accounted for 23.4 percent of single-family home and condo sales in the second quarter of 2020, down from 26.6 percent in the first quarter and from 24.4 percent a year ago. This latest figure reflects the lowest percentage since 2007.
Texas and California Take the Lead for FHA Loan Volume
Texas is one of two states with the highest level of FHA loans, according to the report. Nationwide, buyers choosing FHA loans to purchase a home accounted for 12.5 percent in Q2 2020, up from 12.3 percent in the previous quarter and from 11.6 percent a year earlier.