In 2025, home flippers across the U.S. Saw their profits shrink to depths not witnessed since the Great Recession. Resale gains dropped sharply as soaring borrowing costs and record-high home prices squeezed investor margins.

Flipping Activity Declines Amid Rising Costs

Last year, investors flipped just under 300,000 single-family homes and condos nationwide, marking a nearly 4% drop from 2024. That’s the smallest volume since 2020. ATTOM Data Solutions, which tracks property sales and flips, revealed these figures in its year-end report.

Flips accounted for roughly 7.4% of all home sales, down from 7.6% a year earlier. Despite national home prices reaching new peaks, the typical flip generated an average gross profit of $65,981 — a decline from $77,000 the year before. The return on investment (ROI) slid to 25.5%, the lowest point since the financial crisis rocked the housing market in 2008.

Post-Recession Boom Gives Way to Squeezed Margins

During the decade after the Great Recession, flipping was a hot strategy. Investors often bought homes for less than $150,000 and flipped them for $225,000 or more, raking in returns above 50%. But the market has shifted dramatically since then.

Rising mortgage rates and home prices have pushed costs up, making it tougher to find deals where profits stay healthy. "Competition for homes remains strong due to tight supply," said Rob Barber, CEO of ATTOM.

"With prices staying elevated, investors are finding it harder to secure deals that deliver strong returns."

Borrowing has also become more prominent. Over a third of flipped homes in 2025 were purchased with investor financing, a slight increase from 2024. In some metros like San Diego and Lincoln, Nebraska, over 60% of flips were financed rather than bought with cash.

Changing Buyer Preferences and Market Challenges

Buyers aren’t as keen on ready-made flips as before. Higher mortgage rates have shifted demand toward fixer-uppers, where buyers can customize and build sweat equity themselves. Joel Berner, senior economist at Realtor.com, explained that affordability issues are pushing buyers away from homes with pre-selected finishes, making it harder for flippers to command premium prices.

To stay profitable, investors are adapting. The median flipped property in 2025 was built in 1978 — the oldest in ATTOM’s records — indicating a push toward older homes that may require more renovation but offer better margins. Flippers are tightening budgets and becoming more disciplined about renovations to control costs.

Regional Variations in Flipping Activity

Flipping rates fell in about two-thirds of metros studied, with 142 of 215 metropolitan areas seeing year-over-year declines. Some of the steepest drops occurred in places like Salisbury, Maryland; Tallahassee, Florida; and Lafayette, Indiana, where flipping activity dropped between 35% and 42%.

Still, a handful of markets experienced flips surging. Binghamton, New York, led the pack with a 136% increase, followed by Boulder and Greeley, Colorado. These areas may offer bargains that attract investors willing to take on older or undervalued properties.

Cash purchases still dominate in smaller markets such as St. Cloud, Minnesota, and Utica, New York, where over 85% of flips were bought without financing. That contrasts with larger urban areas where loans are more common among investors.

Profit Margins Narrow Across the U.S.

Profitability took a hit in most regions. Out of the 215 metros analyzed, 150 saw their average ROI decline. Smaller markets that showed strong returns in 2024 faced sharp contractions last year. The squeeze is linked to rising acquisition costs and renovation expenses, alongside a more cautious buyer base.

Investors face an uphill battle balancing the need to renovate older homes against the risk that buyers won’t pay extra for updated finishes. It’s a delicate dance between cost management and market demand.

After years of strong gains, the home flipping market is finally cooling down. Borrowing costs are high and buyers' tastes are changing, so investors need to rethink how they find and renovate properties. It's still unclear if flipping will bounce back to the levels seen after the recession.