Profit margins are up for home flips — but there’s a catch


After years of declines, home-flipping profits are coming back. That’s according to a report released this week by Attom, which showed that the typical profit on a flip in the second quarter of 2024 was 30.4%, the fourth time in five quarters that margins rose.

Attom said that flippers have struggled in comparison to other types of sellers in recent years because they’ve exhibited an “unusual pattern” of timing the market poorly. The string of profit-margin gains could be a signal that flippers are beginning to self-correct.

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“The Spring home-buying season of 2024 brought another sign of hope for home flippers that the rebound in fortunes that began for them last year was more than just a temporary thing,” Attom CEO Rob Barber said in a statement.

“It’s not as if profits have shot through the roof and investors are riding a new wave of good times. Far from it, as they continue to struggle to benefit from the broader market boom. But the second-quarter numbers did show another step in the right direction.”

The report comes with a few caveats. Attom measures the profit margin on home flips by subtracting the median purchase price from the median resale price, so costs related to renovations, mortgages and property taxes eat into the final margin.

The typical margin of 30.4% is down a whopping 26 percentage points compared to its peak in 2016. Measured in dollar amounts, gross profits for home flips reached roughly $73,500 in Q2 2024, down from a high point of $81,000 in 2022 but above last year’s low of $61,000.

Underscoring the struggles for home flippers are sale prices. Median home prices for single-family homes and condominiums rose 9% compared to the previous quarter and were up 6% year over year, but prices for flipped homes rose only 2%.

The share of home sales that were flips fell to 7.5% in Q2 2024 after reaching 8.7% in the first quarter. The share of flips fell across 85.9% of the 185 U.S. metropolitan areas analyzed.

“With the market rising amid tight supplies of homes for sale around the country and falling interest rates, conditions appear ripe for more improvement over the rest of the year as long as prices don’t shoot up past what most buyers can afford,” Barber said.



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