A total of 308,922 single-family homes and condos were flipped in the U.S. during 2023, according to data from ATTOM. This represented a 29.3% plummet from the 436,807 total in 2022, marking the greatest annual decline since 2008. Flips accounted for 8.1% of all 2023 home sales, down from 8.6% in 2022.
Roughly one out of every nine flipped home sales, or 10.8%, were sold to buyers using a loan backed by the Federal Housing Administration, up from 8.3% in 2022 and 8.1% in 2021.
Besides a decline in activities, profits and profit margins also sank year-over-year. Homes flipped in 2023 were sold for a median price nationwide of $306,000, and ATTOM noted that gross profits on typical home flips in 2023 dropped to $66,000 nationwide, down from $70,100 in 2022. This translated into a 27.5% return on investment compared to the original acquisition price.
The latest nationwide ROI – before accounting for mortgage interest, property taxes, renovation expenses and other holding costs – was down from 28.1% in 2022 and 35.7% in 2021, hitting the lowest level since 2007.
Investors saw their profit margins decrease for the sixth time in the past seven years as the median price of the homes they flipped dipped slightly faster than the median price they had paid to purchase properties – 4.4% versus 4%.
“In 2023, the landscape for home flipping across the U.S. became increasingly challenging,” remarked Rob Barber, CEO at ATTOM. “Whether the overall market has soared or seen just modest gains in recent years, investors have missed out on the action.”
Barber added that “the sharp decline in the number of home flips likely reflected a combination of a tight supply of homes for sale as well as dwindling returns. Either way, it will take some significant reworking of the financials for home flipping fortunes to turn back around.”
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