Profit margins for home flippers slid to 17-year lows in the second quarter of 2025 as the median investor purchase price for pre-flipped homes hit a high of $259,700.
The 78,621 single-family homes and condominiums flipped in the second quarter comprised 7.4% of total home sales from April through June, roughly on par with the 7.5% of flipped-home sales posted in the second quarter of 2024, according to Attom’s latest quarterly U.S. Home Flipping Report, published Thursday.
On those sales, flippers recorded a typical gross return on investment of 25.1%. Gross profits, the difference between the price a flipper paid for a property and the price they sold it for, also declined, with the typical flipped home netting $65,300, roughly 4% less than the first quarter and 13.6% less than the same time last year.
Rob Barber, CEO at Attom, said shrinking profit margins are due to the “historically high” cost of homes, even for those needing repairs. “The initial buy-in for properties that are ideal for flipping, often lower-priced homes that may need some work, keeps going up.”
At the same time, the cost of flipping homes, like making those repairs, has also risen, outpacing the rate of inflation, which rose 2.7% from the second quarter of 2024 to the second quarter of 2025, according to the consumer price index, a gauge of rising prices.
The cost of home repairs and remodeling in the second quarter rose 3.43% year over year and 0.57% from the first quarter, according to the Q2 2025 Verisk Repair and Remodel Index, which tracks costs on over 10,000 line items ranging from windows to appliances.
Verisk data show home repair and remodeling costs have risen almost 62% since the second quarter of 2015. Attom data show profit margins were roughly 50% on flipped-home gross profits of approximately $60,000 in the second quarter of 2025.
Quarterly repair and remodeling price increases were driven primarily by labor costs, as the share of labor costs for repair and remodeling work rose from 63.8% to 63.82%.
“While costs did continue to rise, they rose at a slower rate than in the first quarter,” said Greg Pyne, vice president of pricing at Verisk Property Estimating Solutions, “falling almost in half from a 0.91% increase to this quarter’s 0.57%.” Prices rose nearly 4% on an annual basis in the first quarter, he said.
As home prices have skyrocketed, prospective homebuyers priced out of the middle of the markets have been more likely to compete with homes targeted by flippers. Profit margins shrank in 58% (107) of the 183 metro areas Attom analyzed on a quarterly basis, and in 70% (128) of the markets year over year, according to Attom.
Metro areas where flipped homes accounted for the largest share of total sales in the second quarter were Warner Robins, Ga. (18.5%); Macon, Ga. (15.5%); Atlanta (13.6%); Columbus, Ga. (13%); and Memphis, Tenn. (12.5%). Besides Atlanta and Memphis, metros with populations exceeding 1 million that saw the highest rates of flipped-home sales were Birmingham, Ala. (11.8%), Cleveland (11.2%) and Columbus, Ohio (10.5%).
Metro areas with the largest drops in flipping profit margins from the first quarter to the second quarter were Fort Smith, Ark. (from 76.3% to 13.1%); Green Bay, Wisc. (from 70.1% to 19.3%); Clarksville, Tenn. (from 65.5% to 26.2%); South Bend, Ind. (from 85% to 52.%); and Hilton Head Island, S.C. (from 27% to -2.9%).
Among metro areas with populations exceeding 1 million, the largest declines in second-quarter flipped-home profit margins were observed in Virginia Beach, Va. (from 74.8% to 59.8%); Orlando, Fla. (from 35.6% to 22.3%); Grand Rapids, Mich. (from 41.4% to 28.6%); Jacksonville, Fla. (from 38% to 27.2%); and Milwaukee (from 45.2% to 35.3%).
