Home Flipping's Profitability Crumbles—Spotlight on Five Resilient Cities

Declining Home Flipping Profits: A Nationwide Trend

According to data from ATTOM, the home flipping industry is witnessing a stark decline in profitability. In 2025, the gross profit from flipped homes averaged $65,981, down from $77,000 in 2024. This marks a significant 25.5% return on investment, representing the lowest ROI since the 2008 financial crisis.

Despite the backdrop of record-high median home sales prices, the market is grappling with a slowdown in demand and an increase in inventory, which have contributed to shrinking profit margins for investors.

The Evolution of Home Flipping

Home flipping, a practice that surged in popularity after the Great Recession, involves purchasing undervalued properties, renovating them, and reselling them for a profit. In its heyday during the pandemic, nearly 441,000 homes were flipped in 2022—accounting for 8.6% of all sales.

This boom appears to have plateaued, tempered by growing affordability concerns and escalating renovation costs. As reported, rising home prices and tax burdens have made this investment strategy increasingly difficult to sustain.

Market Reactions: Less Flipping, More Fixer-Uppers

As profitability dwindles, investor enthusiasm is declining. In 2025, 297,045 single-family homes and condominiums were flipped, a notable decline of nearly 4% from the previous year—the lowest figure since 2020.

Rob Barber, CEO of ATTOM, remarked, “Competition for homes remains strong in many markets due to constrained supply. With prices staying elevated, investors are finding it harder to secure deals that deliver strong returns.”

Realtor.com economist Joel Berner further elucidated the situation: “Affordability is keeping buyers out of the market, leading them to prefer fixer-uppers over completed renovations.” This sentiment highlights a shift towards individualized equity in home projects.

Bright Spots in a Dimming Landscape

While overall trends appear bleak, there are exceptions in specific metropolitan areas where flipping remains relatively profitable. In 142 out of the 215 metropolitan areas analyzed by ATTOM, the home flipping rate fell year-over-year. However, in a third of these regions, flipping activity surprisingly gained momentum.

Leading this charge is Binghamton, New York, which saw a staggering 126.4% increase in home flipping activities from 2024. Boulder, Colorado (+72.4%), Greeley, Colorado (+49.4%), Lexington, Kentucky (+40.3%), and Scranton, Pennsylvania (+31.2%) also reported significant growth.

Profit Margins Persisting in Specific Markets

Even as the broader market fades, profit margins have grown in certain places. For instance, Peoria, Illinois, experienced an increase from a 61.2% profit margin in 2024 to 91.4% in 2025. Other notable cities include:

• Huntington, West Virginia: Increased from 50.6% to 77%
• Lake Charles, Louisiana: From 121.3% to 146.2%
• Cedar Rapids, Iowa: From 29.7% to 49.6%
• Tuscaloosa, Alabama: From 17% to 26.4%

These cities share commonalities, such as relatively affordable housing markets, which support a better environment for flipping.

Looking Ahead: Navigating a Challenging Market

As we analyze these shifting dynamics, the fundamental principle remains clear: while the overall market may exhibit strain, localized opportunities exist for those willing to adapt strategies and navigate challenges. The future of home flipping may depend on buyers' adaptability and the market's evolution in addressing affordability, demand, and homeownership aspirations.

In conclusion, while the tide of profitability is turning for the majority of the home flipping market, a few cities remain exceptions, illustrating the resilience of certain local markets. Investors need to be vigilant and strategic to thrive amidst these fluctuations.