In the face of a global pandemic, home prices have continued to rise across the nation, according to Attom Data Solutions’ third quarter home sales report. In total, 77 percent of metros analyzed posted double-digit annual home price gains, and 86 percent of metros saw profit margins increase.

The typical third-quarter home sale in the U.S. generated a gain of $85,000, up from $75,000 the quarter before and up from $66,000 in the third quarter of 2019.

The typical $85,000 home-sale profit represented a 38.6 percent return on investment (ROI) from the original purchase price, up from 37.5 percent in the second quarter of 2020, and up from 33.7 percent one year ago.

Both raw profit and ROI figures marked highs since the U.S. economy started recovering from the Great Recession in 2012.

Todd Teta | Attom Data Solutions

“Home prices and seller profits across the nation continue racking up new highs as the housing market remains relatively immune from the economic havoc caused by the coronavirus pandemic,” Attom Chief Product Officer Todd Teta said in a statement.

“It’s almost as if the housing market and the overall economy are operating in different worlds. Things remain in flux, given the significant uncertainty about when the pandemic might recede or what impact the recent resurgence could have in different areas of the country. But with mortgage rates at rock-bottom levels and declining supplies of homes for sale, conditions remain in place for continued strong prices and returns.”

The largest annual profit margin increases were seen in St. Louis, Missouri (margin up from 22.4 percent to 37.1 percent); Columbus, Ohio (up from 37.1 percent to 51.6 percent); Salem, Oregon (up from 60.6 percent to 73.9 percent); Indianapolis, Indiana (up from 32.7 percent to 46 percent) and Akron, Ohio (up from 20.7 percent to 33.7 percent).

Profit margins declined in only 14 of the 103 metro areas analyzed, with the most significant decreases seen in Honolulu, Hawaii (down from 43.9 percent to 35.1 percent); San Francisco, California (down from 71.3 percent to 64.5 percent); Fort Collins, Colorado (down from 43.3 percent to 43.7 percent); Miami, Florida (down from 46.8 percent to 41.6 percent) and Las Vegas, Nevada (down from 47.3 percent to 42.9 percent).

Profit margins were highest in western markets, led by San Jose, California (89 percent return); Salem, Oregon (73.9 percent); and Seattle, Washington (73 percent).

Metro areas with the largest year over year increases in median home prices were seen in Bridgeport, Connecticut (up 29.7 percent); Detroit, Michigan (up 27.4 percent); New Haven, Connecticut (up 20.1 percent); Birmingham, Alabama (up 19.7 percent); and Indianapolis, Indiana (up 19.3 percent).

The third quarter also saw a new high in homeownership tenure. Homeowners who sold during this quarter owned their homes for an average of 8.13 years, a high not seen since 2000, up from 7.76 years the quarter before and up from 7.91 years in Q3 2019.

Amid record-low mortgage rates, cash sales were low during the third quarter, only accounting for 21.6 percent of single-family home and condo sales. That number marked the second lowest level of all-cash sales seen since 2007, and was down from 24 percent the year before.

U.S. distressed home sales (including bank-owned sales, third-party foreclosure auction sales and short sales) hit a 15-year low of 7.2 percent of all single-family home and condo sales, and was down from 9.8 percent the previous year.

Those metro areas with a population of at least 200,000 and sufficient data to analyze that saw the greatest proportion of distressed sales included Columbus, Georgia (18.3 percent of sales); Chico, California (17.9 percent); Macon, Georgia (15.9 percent); Montgomery, Alabama (15.9 percent); and Peoria, Illinois (14.8 percent).

Across the country, institutional investing remains low, with institutional investors accounting for 1.7 percent of single-family home and condo sales in the third quarter. That number was up slightly from the 20-year low of 1.6 percent reached during the previous quarter, but down from 3.4 percent the year before.

Buyers with Federal Housing Administration (FHA) loans made up 11.8 percent of all single-family home and condo purchases, down from 13 percent the previous quarter, and down 12.2 percent from one year ago. Areas that saw the greatest percentage of FHA buyers included McAllen, Texas (33.1 percent of sales); Beaumont, Texas (28.5 percent); El Paso, Texas (28.1 percent); Yuma, Arizona (26.3 percent); and Merced, California (26.1 percent).

Email Lillian Dickerson

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription