In what the company’s CEO called an “outstanding quarter,” Realogy’s net income increased in the third quarter of this year, as the company’s home sale transaction volume jumped, thanks partly to rising mortgage rates, the real estate behemoth reported.
Home sale transaction volume jumped 29 percent year over year, exceeding the annual gain of 26 percent reported by the National Association of Realtors (NAR), according to Realogy.
That helped boost quarterly net income by 30 percent from the previous quarter to $109 million on revenue of $1.55 billion, up 21 percent year over year and 1 percent from the previous quarter.
Net income soared 221 percent on an annual basis, but the increase was due primarily to debt payments the company made in the third quarter of last year that dented its bottom line, rather than the year over year increase in home sale transaction volume.
“In our view, the strong volume increase was driven by a combination of pent-up demand, relatively low inventory and a shift in homebuyer preference to purchase existing homes over new homes due to the ability to lock in mortgage rates for the shorter period it takes to close on an existing-home purchase over a new home,” said Richard A. Smith, Realogy’s chairman, chief executive officer and president, in a statement.
On an annual basis in the third quarter, the Realogy Franchise Group (RFG), its franchise segment, and NRT, the operator of its company-owned brokerage offices, reported that closed home-sale transactions increased 19 and 17 percent, respectively, Realogy said.
Those jumps in transactions combined with an annual home-sale price gain of 10 percent at RFG and 8 percent at NRT to produce a 29 percent year-over-year gain in home sale transaction volume. Shares in Realogy were trading up this morning nearly 8 percent from Friday’s close.
Correction: A previous version of this story incorrectly stated that Realogy’s net income increased 321 percent. In fact, it increased 221 percent.