2Q Home-Flipping Rate Declines Following Year of Increases
ATTOM, Irvine, Calif., released its second-quarter U.S. Home Flipping Report, showing 115,198 single-family houses and condominiums in the United States flipped in the second quarter. Those transactions represented 8.2 percent of all home sales in the second quarter, or one in 12 transactions, down from 9.7 percent, or one in every 10 home sales, in the nation during the first quarter, but still up from 5.3 percent, or one in 19 sales, a year ago.
Despite the decline, the home-flipping rate during the second quarter of this year still stood at the third-highest level since 2000, below the high point registered in the first quarter of 2022.
“The second quarter was another strong showing for fix-and-flip investors,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “The total number of properties flipped was the second-highest total we’ve recorded in the past 22 years, and the median sales price of a flipped property – $328,000 – was the highest ever. The big question is whether the fix-and-flip market will begin to lose steam as overall home sales have declined dramatically over the past few months, and the cost of financing has virtually doubled over the past year.”
Among all flips nationwide, the gross profit on typical transactions (the difference between the median purchase price paid by investors and the median resale price) hit $73,700 in the second quarter, up 10 percent from $67,000 in the first quarter and up 10.1 percent from $66,944 a year ago.
Typical profit margins, meanwhile, rose during the second quarter after six straight periods when they had fallen or virtually stayed the same. The typical gross-flipping profit of $73,700 in the second quarter translated into a 29 percent return on investment compared to the original acquisition price. While that remained down from 33 percent a year earlier – and far below the peak of 53.1 percent this century, which hit in 2016 – the latest margin was up from 25.8 percent in the first quarter of 2022.
