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Slowing home-price growth gives many buyers a helping hand, but it’s taking a bite out of home sellers’ net profits.
In the first quarter of 2019, sellers realized an average price gain of $57,500, or an average 31.5 percent return on their home’s purchase price, according to a new report from ATTOM Data Solutions. That’s down from an average gain of $60,000 in the fourth quarter of 2018 but higher than the average gain of $56,733 a year ago.
The research reveals that home sellers in the West had the highest average returns of the 123 metropolitan areas surveyed. Those areas with the highest gains include: San Jose, California (84.1 percent); San Francisco (70.9 percent); Seattle (63.1 percent); Modesto, California (59.7 percent); and Salt Lake City (56.5 percent).
“We are starting to see home sales prices and profit margins softening for the nation, and the average homeownership tenure did see a slight dip from last quarter,” said Todd Teta, chief product officer at ATTOM Data Solutions, in a statement. “However, home prices are still above pre-recession peaks in 59 percent of local markets, and as the buying season starts to kick into gear, the next few months may provide even more answers to the question of whether a lasso is indeed around the market or if the recent trend is a temporary bump in the ride.”
The report examined another important metric for housing health: homeownership tenure, or the length of time homeowners stay put before selling.
Homeowners who sold in the first quarter had an average tenure of 8.05 years, ATTOM reported. While that’s down just slightly from a record-high average tenure of 8.17 years in the last quarter of 2018, it’s higher than the average year-over-year homeownership tenure of 7.75 years. Before the Great Recession, homeowners stayed in their homes an average of 4.21 years between the first quarter of 2000 and third quarter of 2007.