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 АТТОМ’s Q1 2025 U.S. Home Flipping Report.
A total of 67,394 односемейный homes and condominiums were flipped between January and March, representing 8.3% of all продажи дома.
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
Согласно отчет, 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 инвестор 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,” Роб Барбер, 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 Атланта 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 Жители Нового Орлеана (4.9%) and Сиэтл (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, Южная Каролина, returns plummeted from 160.2% in Q4 2024 to just 31.3% in Q1 2025. Ocala, Флорида, saw margins fall from 125% to 50.6%, while in Chattanooga, Теннесси, 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 Остин (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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