About 79,000 homes were flipped during the second quarter, representing about 7.5% of all home sales, according to ATTOM’s U.S. Home Flipping Report.
That’s down from 8.7% of all sales in the U.S. during the first quarter.
However, ATTOM notes that this is a common pattern during the busy annual springtime buying season each year when other types of home sales spike.
The flipping rate also was down slightly from 7.9% a year earlier.
While the rate declined, fortunes kept ticking upward for investors who buy, renovate and quickly resell homes. Investors typically earned a 30.4% profit nationwide before expenses on homes sold during the second quarter, marking the fourth time in five quarters that margins increased following a six-year period of nearly continuous drop-offs.
However, the typical profit margin on homes flipped during the second quarter of 2024 – based on the difference between the median purchase and median resale price – remained about 25 percentage points below peaks hit in 2016.
It also stayed within a range that could easily be wiped out by carrying costs that include renovation expenses, mortgage payments and property taxes, revealing anew the struggles home flippers are having in turning healthy profits.
But the return on investment was up slightly from both the first quarter and from a low point over the past decade of about 25% in the first quarter of last year.
Gross profits on typical flips increased to about $73,500. That remained down from a high of almost $81,000 reached in 2022, but up from $70,000 in the first quarter and more than $12,000 above last year’s low point.
“The Spring home-buying season of 2024 brought another sign of hope for home flippers that the rebound in fortunes that began for them last year was more than just a temporary thing,” says Rob Barber, CEO for ATTOM, in the report. “It’s not as if profits have shot through the roof and investors are riding a new wave of good times. Far from it, as they continue to struggle to benefit from the broader market boom. But the second-quarter numbers did show another step in the right direction.”
Barber adds that “with the market rising amid tight supplies of homes for sale around the country and falling interest rates, conditions appear ripe for more improvement over the rest of the year as long as prices don’t shoot up past what most buyers can afford.”
Photo: Phil Hearing