Home flipping slowed in early 2026 but investors saw returns tick up

ATTOM data shows that home flipping activity declined in early 2026 even as investor profits edged higher, signaling a modest rebound in returns after a prolonged downturn.

A total of 64,348 single-family homes and condominiums were flipped in the first quarter of 2026, representing 8% of all home sales from January through March, according to ATTOM’s Q1 2026 U.S. Home Flipping Report, released Thursday.

That share rose from 7.2% in the prior quarter but was down from 8.2% during the same period last year. The number of flips also fell from 69,711 in Q4 2025 and 70,579 in Q1 2025.

Profitability improved slightly, with typical gross returns rising to 25.4%, up from 24.7% in the fourth quarter, which marked the first quarterly gain in nearly two years. Even so, margins remained below year-ago levels, when flipped homes generated a typical return of 29.6%.

Gross profits increased to $66,000, up from $64,300 in the prior quarter, but they also trailed the $74,172 figure recorded in the first quarter of 2025.

“The first increase in flipping returns in nearly two years is a welcome sign for investors,” ATTOM CEO Rob Barber said in a statement. “The market remains far more competitive than it was during the peak profit years, but this quarter’s gains suggest that conditions may be stabilizing.”

Flipping activity rose on a quarterly basis in 77% of the 174 metro areas analyzed, although it declined year over year in 56.3% of markets. The highest flipping rates were in Columbus, Georgia; Atlanta; Canton, Ohio; York, Pennsylvania; and Spartanburg, South Carolina.

Among large metros, Dallas; Kansas City; and Memphis, Tennessee, posted some of the highest flipping rates, while Seattle; Tulsa, Oklahoma; and Honolulu had some of the lowest.

Cash purchases accounted for 61.1% of flipped homes, down slightly from the prior quarter but higher than a year earlier. Flips took a median of 165 days to complete, up modestly from both prior periods. Buyers who utilized Federal Housing Administration (FHA) financing made up 10.2% of flipped-home purchases, down from a year earlier.

Margins varied widely by price tier, with homes purchased between $100,000 and $200,000 producing the strongest typical returns at 32%, while properties bought for less than $50,000 posted a 14% loss.

Industry participants cautioned that rising gross margins do not necessarily translate into stronger net returns. Sean Faries, CEO of Land Gorilla, said the headline figures mask meaningful cost pressures.

“I’d be cautious reading this as flippers suddenly making more money,” he said in a statement. “What the data really shows is a more selective market, where the deals that don’t pencil are getting screened out and the operators still active are buying better. That’s discipline, not a rebound.

“The headline here is a gross margin, not a profit. It’s the spread between what an investor paid and what they sold for, before rehab, financing, carrying costs, and the cost to sell,” he added.

Megan Castleton, chief credit officer at Constructive Capital, said the current environment is forcing a more disciplined approach.

“The lesson for brokers is simple: stop selling ‘flip activity’ and start selling ‘flip viability.’ In this market, the difference between a fundable opportunity and a bad trade can be just a few points of margin,” Castleton said.

“Agents are in a strong position to add value because today’s flip market is less about buying cheap and more about buying right. … The market is rewarding discipline again.”

This article was written by Sarah Wolak and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.