House flipping has become increasingly popular over the past few years, although interest may be starting to wane.
Out of all home sales in the second quarter of 2024, 7.5% were flips. That’s down from 8.7% in the previous quarter.
There’s still plenty of money to be made in home flipping. Gross profit on home flips and return on investment are both up from the first quarter of 2024 and year-over-year.
Are you thinking about getting into the fix-and-flip game? Want guidance on where to do your next flip? Read on for more essential flipping stats to have on your radar.
Nationwide house-flipping stats: Return on investment, flipping rates, and more
House flips as a percentage of all home sales
Percentage of all home sales
In the second quarter of 2024, 79,540 single-family homes and condos were flipped, roughly 7.5% of all home sales in that quarter, according to Attom Data.
That’s down 14% from the previous quarter and 5% from the previous year.
The number and percentage of home purchases that ended up being flipped peaked in the first quarter of 2022. Ten percent of home purchases, nearly 126 thousand properties, were flips that quarter.
Gross profit and return on investment
House-flipping gross profit and return on investment
The average return on investment (ROI) for house flipping in the second quarter of 2024 was 30.4%, and the average gross profit was $73,492, according to Attom.
Popular as it is, house flipping has become less profitable over the past several years. In 2016, it netted an average ROI of 49.2% and an average gross profit of $62,624. In 2023, ROI was 27.5% and gross profit netted $66,000 on average.
Home flipping ROI and gross profit have risen in the first two quarters of 2024 after see-sawing in 2022 and 2023.
Rising median home prices are at least partially responsible for declining returns on investment.
Financed flips have fallen over the past couple of years. Thirty-seven percent of house flips were purchased with financing in 2023, compared to 39% in 2021 and 43% in 2017.
Investors are opting to buy, fix and flip homes with cash as a result of increased competition in the housing market. Sellers typically prefer cash offers, particularly banks and lenders with distressed properties to sell.
Home-flipping returns by state
Home-flipping returns by state
Homes flipped in Pennsylvania generated the largest return on investment in the second quarter of 2024, providing a 81.4% return on average, according to Attom. While significant, that’s down from 2022, when houses flipped in the state had an average return of 85.6%. It’s also well off the overall 2022 maximum average ROI of 130% from homes flipped in Delaware.
Only two other states -- Maryland and Kentucky -- had average returns on investment for house flipping of more than 60%. In 2021, eight states had average returns on house flipping over 60%.
In terms of gross profit, flips in Washington, D.C., brought in the most cash on average, or $213,601. That’s down from $215,012 in 2022.
Fix-and-flippers in Montana had it the worst in the second quarter of 2024; house flipping there only netted investors a 2.6% return on average in 2023, which was worth $11,380.
The ROI for house flipping grew in 28 states from the first quarter of 2024 to the second quarter. These are the states that saw the largest increase in ROI:
- Wyoming: 1.1% ROI in Q1 2024 to 19.7% in Q2 2024
- Ohio: 33.3% to 51.8%
- Oklahoma: 38% to 51.7%
- Washington: 22.3% to 33.3%
- Nebraska: 44.4% to 52.9%
- Washington, DC: 38.4% to 46.6%
- Arkansas: 40.2% to 47.8%
- Nevada: 11.3% to 18.6%
- Utah: 4% to 11%
- West Virginia: 39.6% to 46.4%
The states that saw the largest drop in ROI from the first quarter of 2024 to the second quarter
- Delaware: 66% to 34.8%
- Iowa: 38.3% to 29.7%
- Michigan: 62.2% to 53.8%
- Virginia: 64.1% to 55.8%
- Connecticut: 44.6% to 38.1%
Best markets for house flipping
The best markets for house flipping
Pittsburgh boasts the best returns for house flippers, netting them an average of 114.7% back on their investments in the second quarter of 2024.
Pennsylvania is home to four of the 10 best markets for house flipping by ROI: Pittsburgh, Scranton, Harrisburg/Carlisle, and York/Hanover.
The best market by gross profit is San Jose/Sunnyvale/Santa Clara in California, where flippers made an average of $350,000.
The worst market for house flipping is Tyler, Texas which is one of two markets in which flippers lost money in the second quarter of 2024. The average ROI was -2.6%, and losses averaged out to $7,262. The greater Naples market in Florida was the only other area to see a negative average return, costing investors $12,500 on average, a -1.9% return. Five of the 10 worst markets for house flipping by ROI in 2023 were in Texas and all 10 were in the south.
These are the best and worst markets for house flipping by gross return on investment in the second quarter of 2024.
Best markets for house flipping by ROI
| Market | Q2 2024 Flipping Gross Profit | Q2 2024 Gross ROI |
|---|---|---|
| Pittsburgh, PA | $109,000 | 114.7% |
| Scranton--Wilkes-Barre--Hazleton, PA | $101,488 | 101.5% |
| Buffalo-Cheektowaga-Niagara Falls, NY | $110,000 | 95.7% |
| Harrisburg-Carlisle, PA | $113,000 | 89.0% |
| South Bend-Mishawaka, IN-MI | $85,563 | 88.5% |
| Rochester, NY | $107,000 | 85.6% |
| Flint, MI | $74,025 | 85.1% |
| Baltimore-Columbia-Towson, MD | $159,750 | 84.0% |
| York-Hanover, PA | $110,719 | 81.8% |
| Peoria, IL | $63,188 | 79.0% |
Worst markets for house flipping
Worst markets for house flipping by ROI
| Market | Q2 2024 Flipping Gross Profit | Q2 2024 Gross ROI |
|---|---|---|
| Tyler, TX | -$7,262 | -2.6% |
| Naples-Immokalee-Marco Island, FL | -$12,500 | -1.9% |
| Warner Robins, GA | $5,316 | 2.1% |
| Daphne-Fairhope-Foley, AL | $7,769 | 2.2% |
| Killeen-Temple, TX | $6,013 | 2.7% |
| Lubbock, TX | $5,584 | 2.7% |
| Austin-Round Rock, TX | $13,050 | 3.1% |
| Provo-Orem, UT | $16,804 | 3.4% |
| Manchester-Nashua, NH | $19,000 | 4.1% |
| Tuscaloosa, AL | $8,750 | 4.2% |
The bottom line for investing in house flipping
House flipping is not generating the same return on investment as in years past but gross profit has shown promising signs. House prices have been growing faster than the value of flipped homes which has cut into returns.
Inflation, stubbornly high mortgage rates, and other economic headwinds challenged homebuyers in recent years as well as home flippers who are looking to resell. Still, house flipping remains popular, and there are lucrative markets to tap into. Cooling inflation and declining mortgage rates may provide a boost to the industry.
Statistics aren't everything, but they can provide a good idea of what sort of competition house flippers face and in which markets to focus investments. They also offer a baseline to set expectations for profits and ROI.
The bottom line is that the capital costs of house flipping remain high, while returns have shrunk.
Thankfully, there’s more than one way to invest in real estate, including residential real estate. Real estate investment trusts, or REITs, are among the most accessible ways for anyone to gain exposure to real estate without having to oversee a construction project and put a sizable amount of cash on the line.
Sources
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