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House-flipping profits continued to rebound in the second quarter, according to ATTOM.
That’s as home prices grew between the time a property was purchased and sold.
But the volume of home-flipping activity fell, accounting for 1 of every 13 sales.
Surging US home prices this year have pushed profits up for house flippers in the second quarter, ATTOM reported on Thursday.
Gross profit on a typical house flip increased to $66,500 in the second quarter, up 18% from $56,250 in the first quarter, though that’s well below the all-time high of $102,063 in 2022.
That translated to a 27.5% return on investment, still well off the 61% record high, but up from 22.9% in the first quarter and 22.3% in the fourth quarter.
“Fortunes for investors who flip homes for quick profits are showing more signs of turning around after a long and unusual period when they went down while the rest of the market went up,” ATTOM CEO Rob Barber said in the report.
The rebound came as the median price for a single-family home spiked 10% during the spring buying season.
High demand and low inventory in the housing market have helped drive residential prices up through this year.
And though mortgage rates have also surged, current homeowners are reluctant to sell and give up their low rates, aggravating the supply shortage and locking many middle-income homebuyers out of the market.
But while home-flipping profits grew, activity decreased through the quarter. Flips represented about 8% of all home sales, down from 9.9% in the first quarter and hitting the lowest share since 2021.