BAM Key Details:

  • ATTOM released its Q3 2023 U.S. Home Flipping Report, showing a second consecutive quarterly decline in home flipping activity—to its lowest level in two years. 
  • But while the share of home sales tied to home flipping has continued to fall, home flipping returns have risen for the third quarter in a row, rebounding from a slump and rising to their highest levels since mid-2022. 

Home flipping activity has dropped for the second straight quarter, falling to its lowest point in two years. And yet, home flipping returns—both margins and raw profits—keep rising. 

That’s the news from ATTOM’s third quarter 2023 U.S. Home Flipping Report, which shows investor profits ticking up for the third quarter in a row across the U.S. in Q3 2023. 

The report shows 72,543 single-family homes and condos were flipped, accounting for 7.2% of home sales nationwide (about one of every 14) from July through September 2023. 

That figure is down from 7.9% in the second quarter of 2023 and from 7.7% in Q3 2022. 

And while that rate is still historically high, limited inventory and elevated mortgage rates have likely contributed to the two-quarter slide. Meanwhile, the uptick in investor profits speaks to the impact of smaller quarterly home price declines, as well as pent-up buyer demand

Home flipping rates slip for two consecutive quarters

As a share of total home sales, home flips decreased from Q2 2023 to Q3 2023 in about 74% (136) of the 183 U.S. metro areas with enough data to analyze. 

Most metro-level declines amounted to less than two percentage points (ppts). Metros were included in the study if they had a population of at least 200,000 and a minimum of 50 home flips in Q3 2023. 

The five metros with the largest home flipping rates in Q3 2023:

  1. Macon, GA (flips comprised 16.1 percent of all home sales)
  2. Salisbury, MD (14.1 percent)
  3. Spartanburg, SC (13.3 percent)
  4. Atlanta, GA (13.2 percent)
  5. Fayetteville, NC (12.8 percent)
ATTOM-US-Home-flipping-trends-Q3-2023

Source: ATTOM

The largest home-flipping rates among metros with populations of over one million: 

  1. Atlanta, GA (13.2%)
  2. Memphis, TN (12.5%)
  3. Jacksonville, FL (10.8%)
  4. Phoenix, AZ (10.4%)
  5. Cincinnati, OH (10.2%)

The five metros with the smallest home-flipping rates in Q3 2023:

  1. Seattle, WA (3.8%)
  2. Madison, WI (3.9%)
  3. Honolulu, HI (3.9%)
  4. Bridgeport, CT (4%)
  5. Lansing, MI (4.1%)

Highest Q3 2023 flipping rates by region: 

  • South (9.1%)
  • West (8.1%)
  • Midwest (6.5%)
  • Northeast (5.2%)

Home flipping profits/margins are up in half of the U.S.

Investors saw another quarterly improvement in their home-flipping returns in Q3, rebounding from a slump that cut profit margins by almost two-thirds from early 2021 to late 2022. 

Profit margins, along with raw profits, climbed to their highest levels since the middle of 2022. 

  • The typical Q3 profit margin for home flipping, based on the difference between the median purchase price and the median resale price for home flips, hit 29.8% nationwide—well below the peaks hit in 2021 but up from 29% in Q2 2023 and up seven percentage points (ppts) from a low of 22.4% in Q4 2022. 
  • Raw profits on typical home flips across the U.S. rose to $70,000—still well below the high of $110,000 reached in 2021 but slightly up from Q2 2023 and $15,000 more than the previous year’s low point. 

The comeback for the home-flipping industry is looking more like a real trend than a temporary break in what had been a pretty bleak couple of years. For sure, investment returns still aren’t anywhere close to where they were a couple of years ago. The latest nationwide profit margin also remains barely within the spread that covers the usual holding costs on flips, with wide variations around the country. Nevertheless, home flippers continue to head back in the right direction.

Rob Barber

CEO for ATTOM

The uptick in investor profit margins has less to do with pricing strategy or with an overall increase in home values than with shifts in prices that worked in investors’ favor—from the time they purchased their properties to the time they resold them. 

In the third quarter of 2023, the typical resale price on flipped homes dropped to $305,000—a 1.5% decrease from the previous quarter (Q2 2023). 

But that 1.5% was less than the 2.1% drop in median prices that recent home flippers were seeing when they purchased their properties. 

The smaller quarterly decline in the third quarter is what led to the uptick in investor profits and profit margins.

Home flipping profit trends across the U.S.

The national median resale price of homes flipped in Q3 2023 was $305,000, which generated a gross profit of $70,000 above the median investor purchase price ($235,000). 

That translates to a typical 29.8% profit margin for Q3 2023—up from 29% in the previous quarter (Q2 2023) and from 27% in Q3 2022 (as well as the low point of 22.4% hit in Q4 2022).

The newest nationwide figure is still well below the 60.8% reached in the second quarter of 2021, but it’s on the up, which is good news for home flippers. 

Profit margins increased from the second to the third quarter of this year in 51% (93) of the 183 metros analyzed. They increased year over year in 61% (111) of those markets. 

The five metros with the biggest annual increases in typical profit margins in Q3 2023:

  1. Akron, OH (ROI went up from 50% in Q3 2022 to 114.1% in Q3 2023)
  2. Flint, MI (up from 61.6% to 113.8%) 
  3. Canton, OH (up from 17.8% to 69.6%)
  4. Augusta, GA (up from 44.8% to 93.5%) 
  5. York, PA (up from 61.5% to 107.5%)

The five metros with populations of at least one million that saw the biggest annual increases in typical profit margins for home flipping in Q3 2023:

  1. Birmingham, AL (ROI up from 35.4% in Q3 2022 to 71.9% in Q3 2023)
  2. Buffalo, NY (up from 75.6% to 109.7%)
  3. Cleveland, OH (up from 35.8% to 67%) 
  4. Cincinnati, OH (up from 33.5% to 55.3%)
  5. Tulsa, OK (up from 32.3% to 53.8%)

The recent gains in home flipping returns resulted in typical profit margins of below 30% in only 68—or about one-third—of the 183 U.S. metros with enough data to analyze in Q3 2023. That’s a big improvement over a year ago when half of those metros reported returns that low. 

The five metros with populations of one million or more that saw the smallest ROI on typical home flips in Q3 2023:

  1. Austin, TX (1.2%) 
  2. Dallas, TX (4.9%)
  3. San Antonio, TX (5.7%)
  4. Houston, TX (8.1%) 
  5. Salt Lake City, UT (11.2%)
ATTOM-Home-flipping-profit-trends-Q3-2023

Source: ATTOM

Raw home flipping profits on a metro and regional level

The West and Northeast regions of the U.S. saw the highest raw profits on median-priced home flips in Q3 2023. Twenty of the top 25 metros leading in raw home flipping profits were located in these regions. 

The six metros with the highest raw profits on median-priced home flips in Q3 2023:

  1. San Jose, CA (typical gross profit of $355,000)
  2. San Francisco, CA ($249,000)
  3. Salisbury, MD ($231,015)
  4. San Diego, CA ($189,000)
  5. Bridgeport, CT, and New York, NY ($165,000)

The South, along with some Western metros, dominated the other end of the range, with 24 of the 25 weakest raw profits on median-priced home flips in the third quarter of 2023. 

The five metros with the worst raw profits on median-priced home flips in Q3 2023:

  1. Albuquerque, NM ($1,875 loss); 
  2. Tyler, TX ($1,749 profit); 
  3. Provo, UT ($2,120 profit); 
  4. Austin, TX ($4,939 profit) and 
  5. Beaumont, TX ($6,062 profit)

Also in the ATTOM report: all-cash investing, days to flip, and resales to FHA buyers

Across the U.S. 62.9% of the homes flipped by investors in Q3 2023 were all-cash purchases. That’s up from 62.3% in Q2 2023 but still below the 63.7% share from a year ago (Q3 2022).

Meanwhile, 37.1% of the homes flipped in Q3 2023 had been purchased with financing—down from 37.7% in Q2 2023 but up from 36.3% a year ago (Q3 2022).

All-cash flipping inched up a bit as average home mortgage rates rose by a full percentage point across the country during the third quarter following some small drop-offs earlier in 2023. With rates now dipping back down, the pressure to finance flips with cash is receding a bit. That could lead more investors back to financing their purchases, much as they did when rates were super low a couple of years ago.

Rob Barber

CEO for ATTOM

The average time to flip dropped by 17 days to the lowest level since Q4 2021—falling from 178 days in Q2 2023 to 161 days in Q3 2023, which is also down from 165 days in Q3 2022. 

ATTOM-Days-to-flip-Q3-2023

Source: ATTOM

For the first time in over a year, investor resales to FHA buyers dropped in the third quarter of 2023. Of the 72,543 homes flipped that quarter, 10.1% were sold to homebuyers with loans backed by the Federal Housing Administration (FHA), which is a drop from the previous quarter’s 11.8% (Q2 2023), marking the first quarterly drop since the second quarter of 2022. 

That 10.1%, though, is still up from 8.9% in Q3 2022. 

Among metros with populations of 200,000 or more that saw at least 50 home flips in Q3 2023, those with the highest share of flipped homes sold to FHA buyers—typically first-time homebuyers—were led by these five:

  1. Bakersfield, CA (27.7%)
  2. Visalia, CA (27.4%)
  3. Greeley, CO (27.3%) 
  4. Vallejo, CA (26.7%)
  5. Lakeland, FL (24.95%)

Home flips accounted for at least 10% of all home sale transactions in one of every six or 17.9% (175) of the 979 U.S. counties with at least 10 home flips in Q3 2023. That percentage of U.S. counties with enough data to measure is down from 23.9% in Q2 2023. 

The five U.S. counties with the highest shares of home sales involving home flips in Q3 2023: 

  • Somerset County (Princess Anne), MD (22%) 
  • Lumpkin County, GA (north of Atlanta) (20.4%)
  • Lamar County, GA (south of Atlanta) (20%)
  • Cobb County (Marietta), GA (20%)
  • Hopewell City/County, VA (19.4%)

Read the full report for more information.