Jan 30, 2026
Flipping houses might seem like an appealing way to make a profit, but it can be a risky endeavor — especially in the current climate.
While stories of huge profits might drive some people into the house-flipping business, others may be enticed by the prospect of a hands-on way to build their own fortune.
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But the realities of house flipping can be a lot tougher than what you might have heard, or even seen on popular TV shows.
According to real estate data company ATTOM, house flipping declined in 2024, with only 297,885 single-family homes and condos flipped across the country. This is a 7.7% decline from 2023, and a 32.4% drop from 2022 (1). The proportion of home sales made up by flips also declined, dropping from 8.1% in 2023 to 7.6% in 2024.
Of course, there are still profits to be made. Attom reported that nationwide gross profits for a typical house flip in 2024 was $72,000. That is a return on investment of 29.6% compared to the original acquisition price, though that figure does not include costs such as mortgage interest, property taxes and renovations.
But returns on investment have declined since the heights seen previously in the last decade, Attom reported, with the high point in 2016 being 54.2% return on investment.
A tougher market
Those in the house-flipping game are facing tougher circumstances. Mortgage rates skyrocketed in 2022, with the average 30-year fixed rate climbing above 6%. The average rate for a 30-year fixed rate mortgage sat at 6.18% as of Dec. 24 (2), though Fannie Mae projects that the average 30-year fixed mortgage rate will decline through 2026 to reach 5.9% by year-end (3).
There may be other hurdles to securing financing for house flippers. According to a report from the Wall Street Journal (WSJ), “the specialty lenders that house-flippers often use are getting choosier (4).”
On top of financing, flippers also face rising costs in other areas. Home insurance prices have skyrocketed, with S&P Global reporting that 2024 saw average rates increase 10.4% — and that’s on top of a 12.7% increase for 2023 (5). Finally, inflation pressure and trade uncertainty have also raised the cost of building materials substantially. According to the National Association of Home Builders (6), costs for building materials have risen 34% since December 2020.
The Wall Street Journal also reported that house flippers are facing stiff competition when it comes to buying up homes. “There is increasing competition from institutional and foreign buyers, and it’s becoming harder to find good deals,” said Anthony Youngs, a real-estate consultant and house flipper in Marietta, GA.
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Things to consider if you want to flip
For aspiring house flippers, the big questions to ask yourself include:
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- Do you have access to enough start-up capital?
- Have you run calculations, including potential cost overruns?
- Can you afford to keep a home on the market for an extended period?
- What is your risk tolerance overall?
It’s a complicated financial puzzle, with a lot of room for costs to get out of hand.
Repairs could not only cost you more money than you estimate, but also more time. There’s also the risk of uncovering bigger, more expensive issues once you start peeling back the layers of your “bargain” home.
Also consider the question of whether you are able to weather ups and downs in the market. Consider whether your house-flipping business would be able to survive if you were not able to sell for six months, a year, or more.
Paul and Tanice Myers, a couple who have been flipping for about 15 years, told the WSJ that if they are unable to sell a property for a price where they will break even, or make a profit, they will hold on to the property and lease it out. They lease “for as long a time as necessary to gain price appreciation before selling it,” Tanice Myers said (4).
Finally, consider the trends in the areas that you will be buying and selling in. The Myerses told the WSJ that the types of renovations they do depend on whether the neighborhood tends to be higher income or lower income. Knowing your local market, and the trends within it, will go a long way when it comes to how much profit there is to be made.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
ATTOM (1); Federal Reserve Bank of St. Louis (2); Fannie Mae (3); Wall Street Journal (4); S&P Global (5); National Association of Home Builders (6)
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
