Recent trends in the home flipping industry reveal significant challenges for investors, attributed to soaring mortgage rates, elevated home prices, and a limited supply of properties. According to data from ATTOM, a prominent real estate data provider, the number of single-family homes and condos flipped in the United States fell to approximately 297,000 in 2025. This marks a 3.9% decline from the previous year, becoming the lowest number of flips recorded since 2020. Investor flips made up 7.4% of total home sales in 2025, down slightly from 7.6% the prior year.
The profitability of home flipping is diminishing as well. The typical gross profit for home flippers dropped to $65,981, representing a return on investment of 25.5%. This is a significant decrease from 32% in 2024 and the lowest return percentage since the Great Recession in 2008. Rob Barber, CEO of ATTOM, highlighted that intense competition in various markets, combined with sustained high prices, makes it increasingly challenging for investors to identify deal opportunities that yield strong returns.
Comparatively, during the recovery phase following the financial crisis, profit margins exceeded 50%, peaking at 61% in 2012 when home prices were at their lowest. The current increase in costs related to renovations has further curtailed investor margins, driven by persistent supply chain obstacles and tariff-influenced price hikes for materials.
Despite these adversities, there are indications that the home flipping market may experience a turnaround. Analysts suggest that a moderation in home prices and mortgage rates—currently lower than those of the previous year—could improve investor prospects. A report from John Burns Research and Consulting notes a shift in sentiment, indicating a potential uplift in the fix-and-flip segment with the largest quarterly increase in activity observed in three years during the fourth quarter of 2025. The survey conducted by JBRC in collaboration with Kiavi signifies that 71% of investors intend to purchase more homes this year, up from 66% in 2024 and notably from 49% in 2023.
Evidence suggests that fewer flippers are reporting disappointing sales results, with national figures showing a decline in those selling below expected after-repair value—falling from 21% to 17% in the last quarter. This trend indicates a possible stabilization in the pricing environment, as flippers often cut prices below the market average during downturns to avert prolonged holding periods.
Moreover, several legislative changes from a “big beautiful bill” passed last summer could enhance the profitability for flippers, such as increased depreciation benefits and deductible expenses related to fix-and-flip loans. Additional surveys, such as the RCN Capital Investor Sentiment Survey, also reflect growing optimism among flippers, attributing it to improved market conditions, which include additional inventory and slightly lowered financing costs, as well as a rise in distressed property listings.
Looking forward, the unpredictability of mortgage rates remains a critical factor. A rise in financing reliance—for instance, 37.7% of investors sought financial assistance in 2025, compared to 36.9% the previous year—highlights the intertwining relationship between mortgage costs and flipping profitability. Despite expectations of declining interest rates, geopolitical events, such as the Iran conflict impacting oil prices, have complicated these predictions.
Investors are adapting by seeking older properties—the median flipped home in 2025 was built in 1978, representing the oldest age tracked—along with implementing stricter cost control measures and more strategic renovation plans as they navigate this challenging landscape.
