Home prices rose dramatically in 2020. This much is known. But what was the impact of those rising prices on people who sold their home in 2020? It turns out it was a pretty profitable endeavor.
According to a new report from ATTOM Data Solutions, the average homeowner made just shy of $69,000 when selling their home last year. That’s up from a profit of $53,700 in 2019 and $48,500 in 2018.
ATTOM defines profit on a sale as the difference between what someone paid for their home when they bought it and what they sold it for.
According to the report, selling a median priced single-family home or condo in 2020 netted a profit of $68,843, equaling a 34.7% return on investment compared to the original purchase price. That’s up from 29.4% ROI in 2019 and 27.2% in 2018.
It’s also the highest return on investment since 2006.
According to ATTOM, raw profits and ROI from home sales have risen for nine straight years.
The record-breaking return on investment is the result of the national median home price rising 12.8% to $266,250 in 2020, a price that ATTOM says is a record high.
According to ATTOM, profits rose last year in more than 90% of the housing markets it reviewed.
The report showed that the top 10 markets where homeowners made the most for the home sale were all in the Western part of the country, including San Jose, California (87.3% return on investments); Seattle (72.1%); Salem, Oregon (69.6%); Spokane, Washington (69.2%); and San Francisco (68.2%).
"Last year marked a unique year in the history of home prices and profits in the United States. A once-in-a-century health crisis tore through much of the nation's economy but seemed to have the opposite effect on the housing market," said Todd Teta, chief product officer at ATTOM Data Solutions.
"Demand remained strong as people who could afford the space and relative safety of single-family homes did just that, aided by super-low mortgage rates and a strong stock market,” Teta added.
“But they went after a narrowing supply of housing stock, so prices soared and so did seller profits,” Teta concluded. “While it's unclear how long that will last, in the annals of history, there will be few years recorded as better for sellers and more challenging for buyers."