U.S. Home Seller Profits Top 50% in 2022 Despite Market Slowdown

U.S. home sales in 2022 generated more profit for sellers than they have in the last three years, with Western and Southern regions seeing the biggest increases in investment returns.

Home sellers nationwide realized a profit of $112,000 on the typical sale in 2022, up 21% from $92,500 in 2021 and 78% from $63,000 two years ago, according to real estate data provider ATTOM.

People who sold their homes in the fourth quarter of 2022 had owned their homes for an average of 5.85 years, down from 5.96 years in the previous quarter and from 6.505 years in the fourth quarter of 2021. It’s the third-shortest average amount of time a seller had owned a home since 2012.

All-cash sales are at a nine-year high, accounting for 36.1%, or 1 of every 3 single-family or condo sales in 2022. It’s the highest percentage of all-cash purchases since 2013 and up from 34.7% in 2021 and 22.7% in 2020.

Although the market slowed in the second half of 2022, profits rose from 2021 in 98% of the housing markets analyzed. Based on median purchase and resale prices, the profit figure is the highest level the U.S. has seen since 2008.

“It seems pretty likely that home seller profits peaked for this cycle in 2022,” said Rick Sharga, executive vice president 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.”

Raw profits and returns on investments have improved nationwide for 11 straight years, shooting up again in 2022 as the national median home price increased 10% to $330,000.

The West and South regions had 14 of the 15 metro areas with the highest return on investment (ROI) on typical home sales, led by Hilo, Hawaii, with a 100% ROI; Lake Havasu City-Kingman, Arizona, at 88.4%; Spokane, Washington, at 86.2%; Fort Myers, Florida, at 85.4%; and Port St. Lucie, Florida, at 84.8%.

But profits increased slower than in 2021, reflecting a stall in the nation’s decade-long housing boom. The national median home value dropped 8% in the second half of 2022 as home mortgage rates doubled, inflation soared to a 40-year high and the stock market slumped.

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Those economic drivers cut into how much potential homebuyers could afford, threatening to further erode the housing market.

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