It’s no secret that 2021 was a banner year for real estate sales, but a new report from ATTOM Data Solutions indicates that homeowners that were willing to sell last year reeled in a profit that hasn’t been seen in more than a decade.
ATTOM released its Year-End 2021 U.S. Home Sales Report on Jan. 27, which shows that home sellers realized a profit of $94,092 on the typical sale in 2021—up 45% from 2020 and up 71% from two years ago.
Based on median purchase and resale prices, experts said the profit increase marked the highest level in the United States since at least 2008.
Major takeaways
National median home prices rose 16.9% in 2021 to $301,000, causing profits to surge.
Profits margins rose in nearly 90% of the nation—150 of the 173 metro areas with sufficient data to analyze.
Homeownership tenure dipped to a nearly 10-year low of 6.14 years.
One of every three single-family house and condo sales in 2021 was an all-cash purchase—a six-year high.
Institutional investing accounted for one of every 14 single-family home and condo sales in 2021 in the U.S.—an eight-year high.
Federal Housing Administration sales hit their lowest levels in 14 years.
What this means
Frenzied market behavior filled headlines last year as pandemic-induced stimulus and historically low mortgage rates helped fuel demand for a finite number of homes for sale.
According to the report, a surge of buyers financially unscathed by the pandemic flooded the market throughout 2021. The intense competition for a tight supply of homes contributed to a price surge that proved to be a boon for sellers who were able to reel in nearly $95,000 in profit for their homes.
“What a year 2021 was for home sellers and the housing market all around the U.S.,” said Todd Teta, chief product officer at ATTOM, in a statement. “Prices went through the roof, kicking profits and profit margins up at a pace not seen for at least a decade. All that happened as the virus pandemic raged on, which actually helped drive the increases instead of stifling them. Households that escaped job losses from the pandemic dove into the market, in large part as a response to the crisis. And the rising demand led the market boom onward.”
While 2021 was a record-setting year for price gains and profit margins, ATTOM noted that there are signs that prices could flatten out in this year as declining affordability, lower investor profits, and rising foreclosure activity contributes to a market cooldown that began in the fall.
The report stated that that was layered over with rising inflation and likely increases in mortgage rates this year.
A silver lining is that the current imbalance in demand and supply suggests there is room for at least some additional price gains.
“No doubt, there are warning signs that the surge could slow down this year,” Teta said. “But 2021 will go down as one of the greatest years for sellers and one of the toughest for buyers.”
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