BiggerPockets Daily Brand New Housing Report Shows Falling Profit Margins
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Apr 25, 2025 Home sellers are enjoying hefty profits, yet are witnessing shrinking margins across the board. The latest report highlights specific regions where profits are declining quickest and discusses the rising trend of all-cash sales, now at 42% of transactions. With high mortgage rates influencing buyer behavior, investors are becoming increasingly active in the market. The discussion also sheds light on the overall health of the housing market, showing it may be softening but remains robust.
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Falling Profit Margins with Regional Variance
- Profit margins on home sales dropped to 50.2% in Q1 2025 from 55% a year prior but remain strong.
- Regional differences show Florida markets' margins falling sharply while Midwest and Northeast margins are rising.
Inventory Drives Regional Differences
- Sunbelt markets especially Florida see more inventory and profit margin compression.
- Midwest and Northeast markets have stronger margins due to lingering tight inventory and demand.
Price Trends Favor Midwest and Northeast
- Home prices rose nationally 6% year-over-year but dipped in Florida and Boise, Idaho.
- Midwest and Northeast markets like Syracuse and Toledo show strong price gains bucking trend.