The house flipping game may still be strong from coast to coast, but new data from ATTOM highlights that the return on investment isn’t quite what it used to be.
The Q2 2021 U.S. Home Flipping Report shows that 79,733 single-family homes and condominiums were flipped in the U.S. last quarter. That’s 4.9 percent—or one in 20—of all home sales in the second quarter of 2021, marking the first increase in more than a year.
Compared to the first quarter of 2021, the home flipping rate was up from 3.5 percent, but it was still down from 6.8 percent—or one in 15 sales—from Q2 of 2020.
Even as rates rose, profits dipped to new lows.
According to ATTOM, the gross profit (the difference between the median sales price and the median paid by investors) on the typical home flip last quarter rose to $67,000. An increase of 2.4 percent from $65,400 in the first quarter of 2021, and 3.1 percent from $65,000 in Q2 of 2020.
Profit margins, however, paint a different story. The aforementioned gross-flipping profit of $67,000 translates into a 33.5 percent return on investment compared to the original acquisition price. The national gross-flipping ROI was down from 37.2 percent in the first quarter of 2021, and down from 40.6 percent a year earlier, to its lowest point since the first quarter of 2011.
It’s not all bad news, though. Per ATTOM, the median price of homes flipped last quarter hit an all-time high of $267,000—up 10.6 percent from $241,400 in the first quarter of 2021 and 18.7 percent from $225,000 a year earlier. The annual increase marked the biggest price spike for flipped properties since 2005.