#USA #Irvine #Real Estate #ATTOM #Home Flipping

Home Flipping Profit Margins Plummet to 17-Year Low in Q2 2025

In a troubling trend for real estate investors, the latest report from ATTOM shows that home flipping profit margins have decline drastically, hitting their lowest points in 17 years. During the second quarter of 2025, the return on investment (ROI) from flipped homes fell to 25.1%. This marks a significant decrease from the more profitable years prior, when profits averaged closer to 62.9% back in 2012. The typical gross profit from a flipped home was about $65,300, which is down 4% from the previous quarter and a staggering 13.6% decrease from the same period last year.

Historical Trends

In the second quarter of 2025, approximately 78,621 single-family homes and condominiums were flipped, constituting 7.4% of all home sales from April to June. Notably, this downward trend follows the seasonal pattern where flipping generally sees a higher percentage of total sales in the first quarter of the year.

Real estate analysts believe that the continuous rise in home prices is directly affecting profit margins. As the initial purchase price for properties that are often ideal for flipping continues to grow—now reaching a median of $259,700—potential profits are squeezed tighter than ever. The sales price for flipped homes averaged $325,000, which remains unchanged from the previous quarter.

Rob Barber, CEO at ATTOM, stated, “We’re seeing very low profit margins from home flipping because of the historically high cost of homes.” The competition has intensified as aspiring homeowners are increasingly turning to lower-priced homes that flippers also target, further driving prices up in the market.

Regional Insights

Georgia continues to emerge as a hotbed for flipping activity, with cities like Warner Robins and Atlanta showing the highest percentages of home flipping in the second quarter of 2025. In fact, Warner Robins saw home flips account for 18.5% of total sales. Other notable cities include Memphis and Macon, reflecting a regional trend where flipping rates are either stagnant or declining compared to earlier quarters.

The report also indicates that 58% of the metro areas analyzed experienced quarterly drops in profit margins. The sharpest declines were noted in regions such as Fort Smith, AR, which saw returns fall from a whopping 76.3% to just 13.1%. Similarly, major cities like Orlando and Virginia Beach recorded sizable declines in flipping profits.

Purchase and Financing Trends

Surprisingly, it was found that homes bought between $100,000 to $200,000 yielded the best profit margins at 37%. On the other hand, properties purchased for upwards of $300,000 showed less favorable return rates, averaging around 22%. Interestingly, cash purchases were the most preferred method, covering 62.6% of flipped homes nationwide. This rate is consistent with previous quarters, indicating that investors continue to favor cash transactions in this volatile market.

Increased Time-to-Flip

An alarming trend is the increase in the time-to-flip for homes, which now averages 165 days. This slight increase could add additional overhead costs to flippers, impacting overall profitability.

Furthermore, the proportion of flipped homes sold to first-time buyers utilizing FHA-backed loans also rose to 11.2%, reflecting a significant shift in buyer demographics targeting these properties.

Conclusion

The data highlights a cooling yet persistent home flipping market in the U.S. for Q2 2025, with mounting pressures from escalating home prices and competitive buyer conditions leading to reduced profit margins. Despite regional strengths particularly in Georgia, the overall outlook remains cautious as profit-seeking investors navigate a challenging market landscape. ATTOM's findings underscore the need for flippers to adapt to these conditions as competition grows stiffer in the face of ongoing housing market shifts.