Home Flipping Profits Rise for the First Time in Nearly Two Years

Thanks to the double whammy of high home prices and high interest rates, the housing market has suffered lately. But the tide could be turning, as a new report shows pinball profit margins are rising for the first time in almost two years.

The typical profit margin for a flipped home was 25.4% in the first quarter of 2026, up from 24.7% in the previous quarter, marking the lowest point since 2008, according to a real estate data analytics firm’s quarterly home flipping report ATOM.

“The first increase in yields in almost two years is a welcome sign for investors,” said ATTOM’s CEO Rob Kapper said in a statement.

“The market remains much more competitive than during peak profit years, but this quarter’s gains suggest conditions may be stabilizing. Success still depends heavily on local market dynamics, with some metros generating strong returns while others remain struggling to achieve profitability.”

The last time there was a quarter-over-quarter increase was in early 2024, when the typical return on investment nationally was around 35%. Last quarter’s increase – albeit less than one percentage point – puts an end to seven consecutive quarters of decline.

For home flippers, this could mark a welcome reversal of recent trends.

When average home sales prices peaked last year, the average investor saw their gross profit – the difference between the average resale price and the original price paid – shrink to just $65,981, down from $77,000 the year before, according to ATTOM.

What’s behind this slight increase? Is it really all about easing housing prices? ATTOM’s Hairdresser says not necessarily.

“While some easing of pricing pressures may have helped margins, the data suggests this rebound has more to do with stabilization than a broad market shift,” Barber tells Realtor.com®.

“Yields are still below last year’s levels, and with longer maturities and large differences between markets, this suggests that investors are adapting to tougher conditions rather than benefiting from a significant drop in house prices.”

Where flippers can thrive – or not

Profitability varied widely across the country, with some metro areas generating strong returns while several major markets in Texas saw only paltry gains, the report said.

Pittsburgh – the metro with the highest return on investment – ​​beat Austin, Texas, which had the lowest. It’s no coincidence that Pittsburgh has an affordable median list of $250,000, while Austin’s is $475,000. When it comes to flipping, price matters.

The metros (with more than 1 million residents) with the largest typical profit margins were, in order: Pittsburgh (85.9%); Buffalo, NY (84%); Virginia Beach, VA (74.9%); Baltimore (65.9%); and Philadelphia (62%).

“In cheaper markets, investors have more room to create value because their upfront costs are lower, but buyer demand remains solid, especially among more price-sensitive consumers,” Barber explains. “You can see that in metro areas like Pittsburgh, Buffalo and Philadelphia, where strong demand combined with more manageable acquisition costs are helping keep returns among the highest in the country.”

The tightest profit margins tended to be clustered in the Lone Star State. While the state was at a high point during the COVID-19 pandemic, prices have risen significantly since then.

The smallest typical pinball profit margins were in Austin (2%); Dallas (4.3%); San Antonio (5.1%); Houston (7.2%); and Salt Lake City (9.5%).

The sweet spot for flippers is homes priced between $100,000 and $200,000, which yield typical profit margins of 32%, according to the report.

While common sense may dictate the lower the price of the home, the greater the ROI, that is not always the case.

Flipped homes originally purchased for less than $50,000 tended to lose money in the first quarter, generating a typical loss of 14% – presumably because the low price means the home needed significant and expensive upgrades.

When it comes to flipping, price is important, but it is not the only factor that determines whether or not a profit can be made. Other metros – such as Baltimore – have plenty of cheap, dilapidated housing, but demand must also be present on the buying side.

Pittsburgh, for example, became a “refuge market” in late 2025, with buyers from other areas increasingly looking for value.

Steel City’s increase in price per square foot and increased inventory show the market is healthy despite the lower entry point, according to data from Realtor.com.

Tarasa Hurleya longtime real estate agent in the area, wrote in a 2025 blog post about what makes the city so attractive to flippers.

“In some cases, a home can be purchased for as little as $20,000, renovated for $50,000 and sold for $160,000,” she wrote. “This high profit potential fuels a frenzy that attracts both reputable developers and opportunistic flippers looking to make a quick profit with minimal effort.”

She tells Realtor.com, “We have some of the oldest homes in the entire country. We have homes that are easily 200 years old.”

But not all old houses will make the best turn. An investor must consider not only the cost of purchasing a house, but also its renovation, and then the price for which the house can be sold in that particular area, which can sometimes vary greatly, even from street to street.

“If flippers come in and think, ‘I’m going to make this look nice,’ it doesn’t come across well. It can bite them in the butt,” Hurley says.

Very old homes may have underlying structural and foundation problems, needing a complete mechanical overhaul to meet standards, sewer lines that need to be replaced, and other complex and bank-breaking problems.

A crucial step in the turnaround process – the renovation – requires skilled workers that are increasingly difficult to find, and also much more expensive than before. Hurley notes that Pittsburgh excels at contracts.

“We have a lot of people here who know how to do things,” she says. “In other places, that level of knowledge is not available or it is very expensive.”

Additionally, Hurley says the city’s major employers, including Google, Apple and many hospitals, always keep workers moving in, keeping purchasing demand high.

Hurley says that as long as a pinball player is knowledgeable, does careful research and works with local talent, Pittsburgh can be a pinball paradise.

“We’re kind of a unicorn,” she says. “But just because you can buy a house for $50,000 doesn’t mean you should.”

All cash purchases

In the pinball world, cash purchases still dominate, with 61.1% of flipped houses being purchased with cash, down slightly from 61.4% in the previous quarter, according to ATTOM.

Flipped homes also take a little longer to sell. Nationally, a typical home flipped in the first quarter took 165 days to move, compared to 160 days in the previous quarter and 164 days at the same time last year.

Jason Westwho buys houses for cash in Louisville, Kentucky, and then resells them (sometimes fixes them up, sometimes not), says a bit of saturation has set in and his days on the market have “definitely increased.”

“I think we were so spoiled since a few years ago,” he says. “Now we’re thinking, ‘What the hell is going on? This house won’t sell.’ They are moving, it just takes longer.

“I think everyone is just getting over how easy it used to be.”