Nearly every Texas market saw the profits on home sales drop in the third quarter.
Profit margins on median-priced, single-family homes and condos nationwide dropped to 54.6 percent in the third quarter, the Houston Chronicle reported. Data from real estate analytics company ATTOM shows that number came down from 57.6 percent in the second quarter.
In Houston, the profit margin dropped to 39.4 percent in the third quarter, down from 41.4 percent in the second quarter. Despite the quarterly drop, the margin is still above the 32.5 percent figure from the third quarter last year.
The profit margin in San Antonio was 41 percent in the third quarter, down more than 2 percent from the previous quarter, while Austin’s profit margin dropped to 75.2 percent, down more than 8 percent.
Despite most metro areas experiencing a drop in profits, Dallas-Fort Worth sellers saw their average profit margin tick up by a half-percent in the third quarter, reaching 55.4 percent.
“Rapidly-rising mortgage rates have not only resulted in fewer home sales, but have begun to impact home prices as well,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “With rates the highest they’ve been in over 20 years, homebuyers face serious affordability challenges, with monthly payments in some markets up 50 percent year-over-year.”
In terms of dollar amounts, sellers made an average of about $120,000 on home sales nationally in the third quarter, down more than 6 percent the quarter before. Sellers in Houston typically netted a profit around $91,075 in the third quarter, down almost 7 percent from the previous quarter.
National data shows that sellers in the third quarter had owned their homes for an average of about 6 years, which is close to the Houston average of 5.7 years.
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— Victoria Pruitt