Home flipping activity continued to cool in the third quarter of 2025 as higher home prices and tighter margins made deals harder to find. According to ATTOM’s Q3 2025 U.S. Home Flipping Report, investors flipped 72,217 single-family homes and condos between July and September. That accounted for 6.8% of all home sales during the quarter.
Both quarterly and yearly numbers declined. Flips were down from 79,335 in Q2 2025 and 75,977 in Q3 2024. Earlier this year and last year, flips made up closer to 7% or more of total sales, showing a clear slowdown.
Profit Margins Continue Long Decline
Returns from flipping homes fell again in Q3, extending a trend that has been underway for more than a decade. The average return on investment (ROI) dropped to 23.1%, down from 26.5% in Q2 and 29.8% a year earlier.
ATTOM CEO Rob Barber said this is the weakest performance since the housing crash.
“Typical returns fell to their lowest level since 2008,” Barber said.
He noted that profit margins had stayed above 25% for more than 15 years until now.
Gross Profits Shrink as Costs Rise
Not only are margins tighter, but total dollar profits are shrinking as well.
- Median purchase price: $260,000
- Median resale price: $320,000
- Median gross profit: $60,000
That compares with $68,000 in the prior quarter and $73,554 a year earlier.
“Rising prices and shrinking margins have changed the flipping business,” Barber said.
He added that the days of easy 40%–60% returns are gone, forcing investors to be more selective.
Southern Metro Areas See the Most Flip Activity
Flipping activity declined in most markets. About 64% of metro areas saw lower flip rates compared to the previous quarter, and roughly the same share showed year-over-year declines.
Still, some Southern and Midwest cities remained active.
Metro Areas With the Highest Flip Rates
- Columbus, GA: 13.5% of all sales
- Tuscaloosa, AL: 12.1%
- Spartanburg, SC: 12.0%
- Canton, OH: 11.2%
- Atlanta, GA: 11.1%
Among metro areas with populations over one million, the highest flip shares were seen in:
- Birmingham, AL: 10.9%
- Memphis, TN: 10.3%
- Dallas: 10.3%
- Phoenix: 9.9%
The lowest flip activity among large metros was found in:
- Seattle: 3.9%
- Honolulu: 4.1%
- Hartford: 4.3%
- Rochester, NY: 4.6%
- Pittsburgh: 4.6%
Profit Margins Drop Across Most Markets
In 61% of metro areas, profit margins fell from Q2 to Q3.
Some of the sharpest drops included:
- Hilo, HI: from 49.4% to 1.2%
- Appleton, WI: from 51.6% to 14.9%
- Hagerstown, MD: from 74.1% to 38.8%
- Erie, PA: from 57.9% to 26.9%
- Augusta, GA: from 79.2% to 50.2%
Only 22% of metro areas posted margins above 50%.
Markets With the Highest ROI
- Lynchburg, VA: 130.5%
- Scranton, PA: 104%
- Pittsburgh: 103.6%
- Buffalo, NY: 94.1%
- Shreveport, LA: 86.5%
Texas Markets Show Single-Digit Returns
Large Texas metro areas struggled the most when it came to profitability.
Lowest Typical ROI Among Large Metros
- Austin: 4.1%
- Dallas: 4.6%
- Houston: 5.1%
- San Antonio: 6.5%
- Salt Lake City: 11.0%
- Raleigh, NC: 11.1%
High prices and strong competition have left little room for profit in these markets.
Cash Remains King in Home Flipping
Most flips continue to be purchased without financing. In Q3:
- 62.9% of flipped homes were bought with all cash
- Slightly higher than Q2, but lower than a year ago
Highest Cash Purchase Shares
- Flint, MI: 85.3%
- Erie, PA: 84.3%
- Youngstown, OH: 84.1%
- Cape Coral, FL: 80.7%
- Toledo, OH: 80.4%
The average flip took 161 days, slightly longer than last year but faster than Q2.
FHA Buyers Play a Growing Role
Homes flipped and sold to buyers using FHA loans made up 10.6% of all flipped sales, slightly higher than last year.
Highest FHA Buyer Shares
- Shreveport, LA: 27.6%
- Stockton, CA: 27.5%
- Modesto, CA: 25.6%
- Port St. Lucie, FL: 25.5%
- Brownsville, TX: 23.5%
Lower down payments continue to attract first-time buyers to flipped homes.
What Q3 2025 Tells Investors
With flips making up 6.8% of all home sales and average ROI dropping to 23.1%, the home flipping market is clearly under pressure. Investors earned less, waited longer, and faced much tighter margins than in prior years.
While some smaller and Southern markets still offer opportunities, many large metros especially in Texas are delivering slim returns. Going forward, success in flipping will depend more on careful market selection, realistic pricing, and tight cost control than ever before. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
