U.S. home sellers are racking up bigger profits than they have in a decade, with CNBC reporting the trend is being driven by fast-rising home prices as well as homeowners staying put longer than usual.
The average tenure of a homeowner who sold in the second quarter of this year came in at just over eight years, the longest since 2000, when ATTOM Data Solutions began tracking the metric. During the last housing boom, in the mid-2000s, the average homeownership tenure was around four years.
Home values recently hit a record high, according to various surveys, and they continue to climb, with demand easily outpacing the supply of homes for sale. Add price gains to increased tenure, and home sellers are seeing their greatest returns in 10 years. Those who sold in the second quarter of this year saw an average profit of $51,000, a 26% return.
All of which begs this question: If profits are high and homeowners have been stagnant, why don’t more people decide to move?
“While it’s the most profitable time to sell in a decade, it’s also extremely difficult to find another home to purchase, which is helping to keep homeowners in their homes longer before selling,” says Daren Blomquist, senior vice president at Attom Data Solutions. “And the market is becoming even more competitive, with the share of cash buyers in the second quarter increasing annually for the first time in four years.”
