Home flipping flopped hard across the country in 2025, delivering investors their lowest profit margins in nearly 20 years.
Investors paid a median price of just over $259,000 for a home last year, flipping them for around $325,000, according to a new report from ATTOM (1), a nationwide real estate data firm. That resulted in average gross profits of $65,981, or a return on investment of 25.5%.
That ROI, the report noted, is the lowest since the Great Recession in 2008, and a 58% drop from the 2012 ROI high of 61.1%.
Additionally, flips of single-family homes and condos in general fell in 2025 to just over 297,000 units — which ATTOM reported is the lowest amount since 2020.
The ATTOM report attributed the decline in home flipping profits to various factors, including higher mortgage rates and home prices.
“With prices staying elevated,” ATTOM CEO Rob Barber said, “investors are finding it harder to secure deals that deliver strong returns.”
Joel Berner, senior economist at Realtor.com (2), also noted price concerns when it comes to house flipping.
“Affordability is what is keeping people out of the market, so they are not very responsive to paying more for a home that someone else has chosen the finishings for,” he said. “They prefer to buy fixer-uppers and put in the sweat equity themselves.”
The average U.S. home price in 2025 ranged between $508,000 and a post-pandemic high of $534,000 (3).
Meanwhile, Harvard University’s Joint Center for Housing Studies found the average monthly mortgage payment (4) on a median-priced home increased 108% between 2020 and 2025, from $1,200 to more than $2,500. Homebuyers needed an annual income of $130,000 to afford that cost, which — at a jump from $70,000 in 2020 — the Harvard report called “historically high.”
As well, the 30-year fixed mortgage rate creeped up to near 7% (5) in January 2025, though it averaged 6.60% for the year — slightly lower than the previous two years but nearly 3% more than in 2012, during the house flipping boom. As of this writing, the 30-year fixed-rate mortgage average sits at 6.38% (6).
Despite the dour financials, however, the ATTOM report did offer some good news for home flippers.
It found that, while flipped home sales did drop in 142 of the 215 metropolitan areas it surveyed, a number of other locales actually experienced an increase in flips. Those include a 136% year-over-year flip increase in Binghampton, New York and a 72% increase in Boulder, Colorado. Greeley, Colorado saw a nearly 50% increase in flips, while Lexington, Kentucky was up 40% and Scranton, Pennsylvania up 31 percent.
“Those metros where returns have improved are especially affordable ones, so flippers can get in for less money upfront and still finish with a listing that’s affordable to buyers on a budget,” Realtor.com’s Berner said.
To that end, house flippers in Peoria, Illinois; Huntington, West Virginia; Lake Charles, Louisiana; Cedar Rapids, Iowa and Tuscaloosa, Alabama all enjoyed between about 20%-30% profit margin jumps year-over-year in 2025.
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Flipping in a harsh real estate market isn’t easy, and it’s advised that you have enough money on hand to both purchase the house and absorb overrun costs, as well as a stockpile of patience in the event that the flip doesn’t happen right away.
“Flippers are having to get more creative to maintain profitability,” ATTOM’s Barber said. “That could include taking on older homes, as the median flipped property in 2025 was built in 1978, the oldest since we began tracking.”
Barber also advised employing “more disciplined renovation strategies,” which includes looking for more straightforward flips (7) to create a living space buyers will love, rather than major projects that eat up time and money you won’t make back.
As the locales that ATTOM flagged as success stories in 2025 showed, flipping homes in affordable markets is also more likely to result in lower overhead costs for you, a lower list price for the eventual buyer and higher profit margins overall. Luxury homes and expensive neighbourhoods are less likely to deliver solid returns in a struggling real estate market.
Real estate investment lender RCN Capital suggests searching out foreclosed homes (8), which they noted are often sold “at prices far below market value” and “present ideal opportunities for investors to purchase them at a steep discount, renovate them, and flip them for a profit.”
And investing in a property you’d be willing to rent out (9) could help you recoup loan costs through rental payments while allowing you to wait for the right market conditions to finally flip it.
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ATTOM (1); Realtor.com (2); Federal Reserve Bank of St. Louis (3); Harvard Joint Center for Housing Studies (4); Yahoo Finance (5); Federal Reserve Bank of St. Louis (6); SLG Property Deals (7); RCN Capital (8); Kiavi (9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
