Profits on home sales reached their highest point in eight years in the third quarter despite a slowing-down of appreciation rates, according to RealtyTrac's U.S. Home Sales Report.
Sellers saw gains on home sales reaching an average of $40,658, the highest rate since the third quarter of 2007. But meanwhile, sale prices rose only 2.4% year-over-year -- the lowest annual appreciation rate since 2012.
And homeowners seemed willing to strike while the iron is hot. There were nearly 2.5 million sales of existing single family homes and condos in the first nine months of 2015, which was the highest level in an equivalent time period since 2006.
"An increasing number of homeowners in 2015 have been cashing out the home equity they've gained during the housing recovery of the past three years," said RealtyTrac vice-president Daren Blomquist in a Nov. 5 press release. "That may be a good decision because the data points to a plateauing market going forward.
But beyond consumer trends, activities from banks and institutional investors showed a mixed picture for the housing market. Institutional investors stepped back slightly, purchasing only 1.5% of family homes and condos that sold in the third quarter, compared to 5.0% in the same period last year. Meanwhile bank-owned homes constituted 8.1% of all sales, compared to 10.8% a year ago, which represented an eight-year trough.
Distressed sale trends could also prove to be both a blessing and a curse. Homes sold while in the foreclosure process also constituted 8.1% of all sales -- the lowest proportion since RealtyTrac began tracking national data in 2000. "The decline in distressed sales is a double-edged sword," said Matthew Gardner, an economist at Matthew Gardner in the announcement. He noted that despite being an indicator of a healthy market, the decline in distressed listings also contributed to chip away at the number of homes on the sales market, bringing back the shortage in inventory.
