About 298,000 single-family homes and condos were flipped in 2024 – a decrease of 7.7% compared with 2023 and down 32.4% from a peak of nearly 441,000 reached in 2022, according to ATTOM.
In addition, flips only represented about 7.6% of all home sales in 2024, down from 8.1% in 2023, as inventory dried up and investors struggled to find homes to flip.
Profits and profit margins on flips increased slightly in 2024 on typical buy-renovate-and-resell projects, but remain near 10-year lows.
Gross profits on typical home flips in 2024 increased to $72,000 nationwide (the difference between the median sales price and the median amount originally paid by investors). That was up from $67,846 in 2023 and translated into a 29.6% return on investment compared to the original acquisition price.
The latest nationwide return on investment (before accounting for mortgage interest, property taxes, renovation expenses and other holding costs) was up from 28.6% in 2023 and from 29.4% in 2022. But it remained barely more than half of the 54.2% peak over the past decade in 2016.
Investors saw their profit margins tick upward as the median price of the homes they flipped increased slightly faster than the median price they had paid to purchase properties – 3% versus 2%.
“The home-flipping industry saw investors shy away even more in 2024 amid the extended period of languishing profits,” says Rob Barber, CEO for ATTOM, in the report. “But even as activity waned, there was at least a glimmer of hope that returns were starting to turn around. While home flippers still seemed to be having difficulty timing the market for big profits, their margins at least stopped going in the wrong direction.”
“This year poses significant uncertainty for investors, what with a short supply of homes for sale, declining numbers of low-priced foreclosure properties, mixed economic forecasts and elevated mortgage rates,” Barber adds. “So, they will have to do some very smart buying and quick renovating to keep the profit rebound going.”
Despite the small gain in profits in 2024, home-flipping continued to stand out as a niche of the U.S. housing market that has seen its fortunes tumble even as the broader market has mostly boomed, ATTOM says.
Looking just at the fourth quarter data, there were about 69,929 home flips during the quarter, which were completed by 54,502 investors, a ratio of 1.28 flips per investor.
The share of homes flipped in the fourth quarter that were purchased by investors with financing represented 36.2% – flat compared with 36.1% in the third quarter but down from 37.3% in the fourth quarter of 2023.
The share purchased with cash remained about the same – 63.8%, compared to 63.9% in the third quarter but up from 62.7% in the fourth quarter of 2023.
The gross-flipping profit on median-priced home flips in the fourth quarter was $66,100, down from $70,000 in both the third quarter of last year and the fourth quarter of 2023.
Photo: Annie Gray