Profit margin on flipping a home is at a 17-year low due to high prices

Core Insights - The profitability of home flipping has significantly decreased, with a return on investment of 25.1% in Q2, the lowest since 2008 [1][3] - Gross profits from home flipping fell by 13.6% year-over-year to $65,300 in Q2 [2] - The median purchase price for flipped homes reached a record high of $259,700, contributing to the declining profit margins [3][4] Market Dynamics - Home prices continue to rise nationally, increasing acquisition costs for investors [3] - A chronic shortage of homes and heightened competition for lower-priced properties are driving up costs for home flippers [4] - Despite declining profitability, home flipping remains prevalent, with 78,621 homes flipped in Q2, accounting for 7.4% of all home sales [5] Broader Housing Market Trends - The U.S. housing market has been in a sales slump since early 2022, with sales of previously occupied homes at their lowest in nearly 30 years [6] - Elevated mortgage rates have contributed to sluggish sales this year, impacting the overall housing market [6]