A version of this article first appeared in the CNBC Property Play newsletter with Diana Orrick. Property Play covers new and evolving opportunities for real estate investors, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large publicly traded companies. Sign up to receive future editions directly to your inbox. Rising mortgage rates, soaring home prices and a lack of supply have all conspired to squeeze home flip investors. According to real estate data provider ATTOM, approximately 297,000 single-family homes and condominiums were flipped across the country in all of 2025. ATTOM defines flips as homes that are purchased and sold within the same 12-month period. This was a 3.9% decrease from 2024 and the lowest flip number in any year since 2020. Investor flips will account for 7.4% of all home sales in 2025, down from 7.6% in 2024. Flips are decreasing because profits are making them less and less valuable. With median home prices at record highs, the typical home flip investor earned a gross profit of just $65,981, or a 25.5% return on investment, according to ATTOM. This was down from 32% a year earlier and the lowest rate since the Great Recession of 2008. “Housing competition remains intense in many markets due to housing supply constraints,” Rob Barber, CEO of ATTOM, said in a release. “As prices remain high, it’s becoming harder for investors to secure profitable deals.”By comparison, profit margins exceeded 50% in the booming decade following the financial crisis, and reached 61% in 2012, when housing prices bottomed out. Net profit, or the investor’s return after taking into account the cost of repairing the property, varies widely depending on local labor, material and financing costs. However, across the United States, ongoing supply chain pressures and tariff-related material price increases continue to drive up the cost of remediating properties prior to flipping, ATTOM said, continuing to compress investor margins. However, there are signs that the inversion market could improve this year, with home prices expected to slow further and mortgage rates remaining below last year’s levels. “While flipping home transaction volumes have been declining for nearly four years, our research shows signs of positive momentum in the fix-and-flip space,” Alex Thomas, research manager at John Burns Research and Consulting, said in a recent report. The company has partnered with Kiavi on the Fix-N-Flip Housing Market Index, which examines investor sentiment in the market. The fourth quarter of 2025 saw the largest quarter-on-quarter increase in three years, reversing six consecutive quarters of decline. Furthermore, the JBRC/Kiabi survey found that 71% of investors surveyed said they will buy more homes this year, compared to 66% last year and 49% in 2024. This is the highest share in the company’s four-year history. A small number of flippers also report disappointing investment results. Nationally, 17% of flippers in the fourth quarter reported sales that were “nearly below” expected after repair volume (ARV), down from 21% in the previous quarter, according to the survey. “This improvement is an early signal that the price environment is stabilizing, as flippers tend to reduce prices faster than typical home sellers during economic downturns (to avoid costly holding periods),” Thomas wrote. He also said other measures included in last summer’s “Big and Beautiful Bill,” including enhanced depreciation, a permanent 20% qualified business income deduction and interest deductions on fix-and-flip loans, could boost fix-and-flip profitability. Other measures of real estate flipper sentiment also cite optimism, including the RCN Capital Investor Sentiment Survey, a quarterly report produced by CJ Patrick Company. “We believe improving market conditions, including increased inventory, easing home prices, and some improvement in financing costs, combined with pent-up demand from buyers and an increase in distressed properties for sale, should provide additional opportunities for flippers,” said Rick Sharga, CEO of C.J. Patrick. The wild card will be mortgage interest rates. According to ATTOM, more investors are using loans: 37.7% in 2025, compared to 36.9% in 2024. Interest rates were expected to be lower this year, but the Iran war and resulting rise in oil prices have upended those expectations. “Flippers needs to become more creative to remain profitable,” Barber said. “This could include underwriting older homes, as the median property flipped in 2025 was built in 1978, the oldest since we began our study, along with tighter cost controls and more disciplined renovation strategies.”
