House flipping has long been sold as a fast track to wealth. Buy a distressed home, fix it up quickly, and sell it for a big profit. Sometimes that still happens. But today, those wins are becoming harder to find, and the risks are growing fast. New data shows that both the number of flips and the profits investors make from them are falling to levels not seen since the last housing crash.
Home flipping activity has dropped sharply over the past few years. In 2024, there were 297,885 single family and condo flips nationwide. That was down 7.7 percent from 2023 and down a steep 32.4 percent from 2022, when nearly 441,000 homes were flipped. According to Attom, a real estate data and analytics firm, flipping made up just 7.6 percent of all home sales in 2024.
That slowdown has continued into 2025. In the third quarter of 2025, 72,217 homes were flipped, accounting for just 6.8 percent of all home sales. That share was lower than both the previous quarter and the same period a year earlier.
Profits Are Shrinking to Crisis Era Levels
The most troubling sign for investors is how much profits have fallen. In the third quarter of 2025, the typical gross return on investment for a flipped home was 23.1 percent. That was down from 26.5 percent the previous quarter and 29.8 percent a year earlier. Attom says this is the lowest flipping margin since 2008, during the housing and mortgage crisis.
Gross profits have fallen as well. The typical flipped home in the third quarter was bought for $260,000 and sold for $320,000, producing a gross profit of $60,000. Just three months earlier, the typical gross profit was about $68,000. A year earlier, it was more than $73,500. These figures do not include renovation costs, financing costs, taxes, insurance, or carrying expenses, which experienced flippers estimate can run between 20 percent and 33 percent of a home’s after repair value.
Rob Barber, chief executive of Attom, summed up the problem clearly. “Rising home prices and shrinking margins have made flipping increasingly challenging,” he said. “What was once a flipping market that consistently delivered 40 percent to 60 percent returns for more than a decade beginning in 2009 has now settled into five straight quarters of returns in the 20 percent range.”
A Real World Success Story That Is Harder to Repeat
Paul and Tanice Myers know both sides of the flipping business. Over the past 15 years, they have flipped about 500 single family homes across Washington, Idaho, and Indiana. One Boise property they purchased for $365,000 was filthy, rodent infested, and badly damaged. After spending about $135,000 and eight weeks on renovations, they sold it for $599,000, a nearly $100,000 profit.
But even the Myerses say those results are becoming harder to achieve. “You need a strong stomach to handle all the risk and uncertainty in this business,” said Rick Sharga, chief executive of real estate market intelligence firm CJ Patrick.
The Myerses say the past few years have forced them to change how they operate. They now avoid heavy rehabs and focus on lighter cosmetic projects that can be completed in under four weeks. “In the worst case scenario, if we cannot get the price we need to break even or make a profit we will hold the property and lease it for rental income,” said Tanice Myers.
High Rates and Tight Supply Are Squeezing Flippers
Several forces are working against flippers at the same time. Mortgage rates remain high, even after Federal Reserve rate cuts. The national average for a 30 year fixed mortgage is still around 6.28 percent, according to Bankrate. That makes homes less affordable for buyers and slows demand.
At the same time, inventory is extremely tight. The United States faces a shortage of about 3.7 million housing units, according to a 2024 Freddie Mac report. Many homeowners are locked into very low mortgage rates and are choosing not to sell. That limits the number of distressed or underpriced homes that flippers rely on.
Financing has also become harder. Specialty lenders that often fund flips are getting more selective, while costs for labor, materials, and insurance continue to rise. Anthony Youngs, a real estate consultant and house flipper in Georgia, says, “There is increasing competition from institutional and foreign buyers, and it’s becoming harder to find good deals.”
Some Markets Still Work, Many Do Not
The pain is not spread evenly across the country. Only 40 of the 182 metro areas tracked by Attom had flipping profit margins above 50 percent in the third quarter of 2025. Strong returns were mostly found in parts of the Midwest and Northeast. Pittsburgh posted a typical margin of 103.6 percent, Buffalo came in at 94.1 percent, and Memphis delivered about 75 percent.
Meanwhile, several major Texas markets saw profits collapse. Austin flippers earned just a 4.1 percent return. Dallas came in at 4.6 percent, Houston at 5.1 percent, and San Antonio at 6.5 percent. In these markets, even small miscalculations can wipe out profits entirely.
Cheap Homes Are No Longer a Safe Bet
One surprising shift is that the cheapest homes are now the riskiest. Homes bought for $50,000 or less actually produced a typical loss of about 14 percent when flipped in the third quarter of 2025. That works out to roughly a $5,000 loss before expenses.
The best returns came from homes originally purchased in the $100,000 to $300,000 range, which produced an average profit margin of about 31 percent. Very high end homes priced above $5 million also performed relatively well, with margins around 28 percent.
Cash Is Still King, But Even That Has Limits
Most flippers continue to rely on cash. In the third quarter of 2025, 62.9 percent of flipped homes were purchased entirely with cash. That was slightly higher than the previous quarter but lower than a year earlier. Cash helps investors move quickly and avoid financing costs, but it does not protect them from falling prices or shrinking margins.
Homes sold to buyers using Federal Housing Administration backed mortgages made up about 10.6 percent of flipped transactions. That share remains relatively low, reflecting affordability pressures faced by first time buyers.
The Game Has Changed
The data paints a clear picture. Fewer homes are being flipped, profits are thinner, risks are higher, and success depends heavily on choosing the right market and the right property. “Investors must choose their markets more carefully as the game has fundamentally changed,” Barber said.
For experienced flippers like the Myerses, adaptation is possible through faster timelines, lighter rehabs, and backup plans like rentals. For newcomers drawn by social media success stories, this is one of the toughest environments in more than a decade.
House flipping is no longer a simple get rich quick strategy. In today’s market, it demands discipline, patience, deep local knowledge, and a willingness to accept that even a well planned flip can go wrong.
