The USA Home Sales Report for the third quarter of 2022 published by the ATTOM analytical agency shows that the profit margin (the difference between the median purchasing price and the median reselling price) reduced to 54.6% in the third quarter compared to 57.6% in the second quarter.
At the same time, house prices fell for the first time in almost three years: the median value of a residential property reduced by 3% over the quarter, down to approximately $340,000.
The rapidly growing mortgage rates not only reduced the housing sales but also started affecting the prices, says Rick Sharga, Executive Vice President of Market Intelligence at ATTOM. Many buyers are no longer able to afford a home because monthly mortgage payments surged by 50% year-on-year in some markets. Prices of residential properties are highly likely to continue dropping in many markets over the next few months.
Nevertheless, the developments in some markets contradict the general trend. For instance, the profit margin grew the most in Milwaukee, Wisconsin (from 51.4% to 54.9%), Miami, Florida (from 68% to 70.9%), and Cincinnati, Ohio (from 50.6% to 53.4%) – among metropolitan areas with a population of at least 1 million people.
Florida’s real estate market is still significantly overheated, so median prices for housing reduced in two of its cities (Crestview – Fort Walton Beach and Naples) over the second – third quarter of 2022 (by 12.8% and 11.3% respectively).