2019, A Very Profitable Year for Home Sellers

By Taff Weinstein at

2019, A Very Profitable Year for Home Sellers

Home sellers made more profit in 2019 than they did a year earlier, with profits hitting the highest levels since 2006, according to ATTOM Data Solution’s US Home Sales Report.

Nationwide, home sellers saw a 34% spike in their return on investment (ROI) with a home price gain of $65,500 on the typical sale. The profit figure grew from $58,100 (+31.4%) in 2018 and up from $50,027 (+27.4%) in 2017.

"The nation's housing boom kept roaring along in 2019 as prices hit a new record, returning ever-higher profits to home sellers and posing ever-greater challenges for buyers seeking bargains. In short, it was a great year to be a seller," said Todd Teta, chief product officer at ATTOM Data Solutions.

Homeowners who sold in Q4 2019 had owned their homes for 8.21 years on average, up from 8.08 years in the previous quarter and up from 7.95 years in Q4 2018.

The US median home price also reached an all-time high of $258,000 in 2019. Around 78% of 134 metros reported hitting new peaks in home prices, including Los Angeles, Dallas-Fort Worth, Houston, Washington, D.C., and Philadelphia.

What Happened to Rates Last Week?

Mortgage backed securities (FNMA 3.000 MBS) gained +30 basis point (BPS) from last Friday's close which caused fixed mortgage rates to move lower compared to the prior week.

Mortgage backed securities (FNMA 3.000 MBS) gained +30 basis point (BPS) from last Friday's close which caused fixed mortgage rates to move lower compared to the prior week.

Overview: We had a holiday-shortened week that didn't have any meaningful economic releases and the Central Banks across the board kept their interest rates the same.  The big push up in pricing (lower rates) occurred Thursday and Friday due to escalating concern over the Coronavirus spread and its longer term impact on China's economy as well as other economies.

Central Bank Palooza: The European Central Bank kept their key interest rate at 0.0% and their deposit rate at -0.5% and have announced that for the first time since 2003 they will begin a complete review of their economic policies. kept their key interest rate at 0.0% and their deposit rate at -0.5% and have announced that for the first time since 2003 they will begin a complete review of their economic policies. The Bank of Canada kept their key interest rate at 1.75%. kept their key interest rate at 1.75%. The Bank of Japan (3rd largest economy) kept their key interest rate at -0.1%.  On Monday (bond market was closed), the People's Bank of China (2nd largest economy) kept their key interest rate at 4.15%.

Taking it to the House: After surging over 30% two weeks ago, Weekly Mortgage Applications fell by -1.2% last week. Both Purchase and Refinance Applications fell by -2.0%.  The November FHFA Home Price Index showed a MOM gain 0.2% of vs est of 0.2%.  December Existing Home Sales hit 5.54M vs est of 5.43M.

What to Watch Out For This Week:

The above are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises.

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

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