A lot of people don’t want to sell their houses because their interest rates are too good and they’re scared they won’t be able to afford something better. A lot of people can’t buy a house because interest rates are too high and they can’t afford anything at all. So when transactions do happen—in 2023, existing US home sales were their slowest since 1995—they’re making slightly less gigantic profits for homeowners.
The real estate data firm Attom said in a report released Thursday (Jan. 25) that profit margins for US home sales fell to 57% last year from 60% in 2022. It’s the first time margins fell since 2011.
“The market definitely softened amid modest price gains that weren’t enough to push profits up higher after a long run of improvements,” said Attom CEO Rob Barber in a news release accompanying the report.
“In 2024,” he continued, “the stage seems set for more small changes in prices as well as seller gains given the competing forces of interest rates that have headed back down in recent months and home supplies that remain tight, but home ownership costs that remain a serious financial burden for many households.”
Home sales climbed during the first two years of the pandemic, but fell off in mid-2022 as supply tightened and homes became prohibitively expensive for many potential buyers.
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