Home flipping activity and profitability in the United States retreated significantly in the third quarter of 2025, with returns on investment hitting their lowest point since the 2008 financial crisis.
According to an analysis released Thursday by real estate analytics firm Attom, the typical gross flipping profit dropped to $60,000, while the return on investment (ROI) fell to 23.1%. This aligns with other industry data tracking the topic.
The report highlights a stark shift in the housing market dynamics that once fueled consistent double-digit gains for investors. While flipping activity remains elevated in specific pockets of the country — most notably Georgia and Delaware — the financial incentives are rapidly evaporating.
The 23.1% ROI recorded in the third quarter marks a decline from 26.5% in the previous quarter and stands as the lowest return recorded since the second quarter of 2008.
The data suggests that the era of easy money in home flipping has come to a close. For over a decade following the Great Recession, investors often enjoyed returns ranging between 40% and 60%. However, rising acquisition costs and a scarcity of distressed inventory have compressed these margins. The median purchase price for flipped homes was $260,000 in the third quarter, against a median resale price of $320,000.
“Home flipping activity and profitability continued to decline in Q3 2025,” said Attom CEO Rob Barber in the report. He noted that the market has shifted into a “fundamentally different environment,” compelling investors to be more strategic as the “consistent 40% to 60% returns” of the past recede into the rearview mirror.
Attom’s analysis tracks with other recent data from industry participants, including a report from Realtor.com. In a statement provided to Scotsman Guide on Thursday following the release of that report, Realtor.com Senior Economist Joel Berner explained that part of this decline stems from pricing missteps.
“We see an elevated rate of price reductions by sellers across the board this year, which we attribute to unrealistic seller expectations,” he said, adding that this is an easy trap to fall into when the pre-renovation value of a home fails to meet projections.
Nationally, 72,217 single-family homes and condos were flipped in the third quarter, according to Attom, accounting for 6.8% of all home sales. This represents a decrease from 7.3% in the second quarter and 7% a year earlier.
Despite the national slowdown, certain states continued to see high volumes of flipping activity. Georgia led the nation with a flipping rate of 10.1%, followed closely by Delaware at 9.6% and Arizona at 9.1%.
However, high activity did not always correlate with high returns. In Texas, for instance — which saw 6,860 flips (an 8.3% rate) — the gross ROI was 5.1%, with average gross profits of just $14,425, representing a decrease of more than $22,000 from a year ago.
Conversely, Tennessee flippers saw a more robust ROI of 47.2%, though this was still a significant drop from the 57.1% witnessed in the third quarter of 2024.
This divergence underscores a shift towards affordability. While expensive West Coast markets struggle with tight margins, lower-cost areas are still attracting investment.
The contracting margins reflect a broader trend where home prices in entry-level tiers are rising, narrowing the gap between the purchase price and the potential resale value after repairs. With profit margins lingering in the low-20% range for five consecutive quarters, the market appears to have settled into a new normal of constrained upside.
