US home sellers get while the gettin's good

LOS ANGELES (AP) — Homeowners who held off on selling their home in 2022 as the housing market slowed missed out on a windfall and may have to settle for slimmer profits if they opt to sell this year.

The sale of a median-priced U.S. home last year translated into a profit of $112,000, a 21% increase from a year earlier and the largest on records going back at least to 2008, according to a report released Thursday by Attom, a real estate data tracker.

“It seems pretty likely that home seller profits peaked for this cycle in 2022,” said Rick Sharga, Attom’s executive vice president of market intelligence.

Years of soaring prices powered the big profits for U.S. home sellers last year, ensuring outsized gains even as sharply higher mortgage rates knocked the housing market into a skid.

Long-term homeowners who decide to sell this year should also benefit from more than a decade of rising home values, but the likelihood that home prices will fall further this year sets the stage for more modest gains.

“Median prices have declined on a monthly basis since mortgage rates doubled between January (2022) and October, and are likely to decline further in many markets across the country in 2023, reducing profitability for home sellers,” Sharga said.

Surging mortgage rates and sky high prices last year slammed the brakes on what had been a red-hot housing market during the first two years of the pandemic. Home sales cratered as higher borrowing costs combined with years of rising home prices pushed homeownership out of reach for many Americans, especially first-time buyers.

Homeowners who sold last year still reaped the financial rewards from years of home equity gains, however. The return on investment for a median-priced U.S. home sold last year was a whopping 51.4%, up from...