High home prices cause house flippers to pull back
- After two straight years of gains, the rate of home flipping flattened in the second quarter of this year.
- The number of homes flipped fell to 5.6 percent, down from 6.9 percent in the previous quarter.
- Home flippers saw an average gross return of $67,516 in the second quarter, representing a 48.4 percent return on investment. That is down from 49 percent in the previous quarter.
House flipping has seen a huge run-up in the past few years, as investors take advantage of tight supply in the market and fast-rising home prices. Popular television shows glorifying the process have also turned regular Joes and Joannas into real estate renegades. Those high prices, however, are now taking their toll.
After two straight years of gains, the rate of home flipping, defined as buying and selling a home in the same calendar year, flattened in the second quarter of this year, according to a new report from Attom Data Solutions. Nationwide, 53,638 single-family homes and condos were flipped in the second quarter, which is 5.6 percent of all home sales during the period. That rate was down from 6.9 percent in the previous quarter and unchanged from a year ago.
Why the slowdown? A drop in profits.
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