The U.S. home flipping market showed signs of strain in the first quarter of 2025 as the number of flipped properties dropped to a six-year low and profit margins continued to erode, according to ATTOM’s Q1 2025 U.S. Home Flipping Report.
A total of 67,394 single-family homes and condominiums were flipped between January and March, representing 8.3% of all home sales.
While that share was up from 7.4% in the fourth quarter of 2024, it marked the smallest number of flips recorded in any quarter since 2018.
Margins shrink, investors cautious
According to the report, the typical gross profit on a flipped home in the first quarter was $65,000, down from $70,000 in the previous quarter. This equated to a 25% return on investment (ROI) before expenses — down from 28% in Q4 2024 and far below the 48.8% ROI seen in late 2020. The average investor paid $260,000 for a property and resold it for $325,000.
“The competitive home market means high prices, which is good for short-term investors on the selling end,” Rob Barber, CEO of ATTOM, said in a statement. “But that dynamic is also making it harder to find under-priced homes to buy up and it’s ultimately squeezing profit margins for the industry.
“It’s tricky to balance at times when the market looks like it could take a downturn. Investors don’t want to buy a property when prices are high and then see them drop before they’re ready to sell.”
Roughly 62% of flipped homes were purchased entirely with cash — a slight decrease from the prior quarter. Financing accounted for the other 38% of purchases, reflecting a relatively stable mix year over year.
Cash transactions were most common in Rockford, Illinois; Toledo, Ohio; and Buffalo, New York, where more than 81% of flipped homes were bought without financing.
Regional differences in activity
Home flips as a share of total sales increased in 132 of 173 U.S. metro areas analyzed, but annual comparisons tell a different story. Two-thirds (115) of these metros saw their shares of flips fall year over year.
The highest flipping rates were concentrated in the South. In Macon, Georgia, flips made up 21% of all home sales — the highest rate in the country. Warner-Robins, Georgia, followed at 20.6%, while Atlanta posted a share of 15.9%.
Memphis, Tennessee, and Akron, Ohio, rounded out the top five at shares of 14.7% and 13.3%, respectively.
Among larger cities with at least 1 million residents, the highest flipping rates were found in Birmingham, Alabama(12.8%); Kansas City (11.6%), Missouri; and Salt Lake City (11.1%). In contrast, Honolulu recorded the lowest share of flips at 4.7%, followed by New Orleans (4.9%) and Seattle (5.5%).
Profit margins down in most metros
Returns on flipping fell quarter over quarter in nearly 46% of metro areas and declined yea over year in 63%.
Some markets saw drastic drops in ROI. In Spartanburg, South Carolina, returns plummeted from 160.2% in Q4 2024 to just 31.3% in Q1 2025. Ocala, Florida, saw margins fall from 125% to 50.6%, while in Chattanooga, Tennessee, they dropped from 125.6% to 81.3%.
Large metro areas weren’t immune. St. Louis saw its typical ROI shrink from 49.3% to 27.3%, while in Fresno, California, the figure fell from 51.3% to 37.8%. Pittsburgh — even though it still boasts one of the nation’s highest ROIs at 100.4% — saw a quarterly dip from 108.7%.
Still, some markets delivered strong returns. Buffalo, New York, led the nation with a 102.1% ROI, followed closely by Pittsburgh and Scranton, Pennsylvania. Other high-performing metros included the Illinois cities of Peoria (89.1%) and Rockford (87.7%).
Larger cities with the weakest returns included Austin (1% ROI), Dallas (3.7%), and Houston (5%).
ATTOM data also shows that lower acquisition costs correlate with higher flipping profits. In markets where typical homes were purchased for less than $225,000, the median ROI was 46.4%. This dropped to 22% for homes purchased between $225,000 and $400,000, and just 19% for homes purchased for more than $400,000.
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