Thanks to the double whammy of high home prices and elevated interest rates, house flipping has suffered lately. But the tide might be turning, as a new report shows flipper profit margins are rising for the first time in nearly two years.

The typical profit margin for a flipped home hit 25.4% in the first quarter of 2026, up from 24.7% in the previous quarter, which marked its lowest point since 2008, according to the quarterly report on home flipping from real estate data analytics firm ATTOM.

“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. Success still depends heavily on local market dynamics, with some metros producing strong returns while others remain difficult places to flip profitably.”

The last time there was an uptick quarter to quarter was in early 2024 when the typical return on investment nationally was around 35%. The increase seen last quarter—albeit less than a percentage point—ends seven consecutive quarters of decline.

For home flippers, it may represent a welcome reversal of recent trends.

As median home sales prices peaked last year, the average investor saw their gross profits—the difference between the median resale price and the median price originally paid—shrink to just $65,981, down from $77,000 the year before, according to ATTOM.

So what’s behind the slight increase? Is it really all about softening home prices? ATTOM’s Barber says not necessarily.

“While some easing in price pressures may have helped at the margins, the data suggests this uptick is more about stabilization than a broad market shift,” Barber tells Realtor.com®.

“Returns are still below last year’s levels, and with longer hold times and wide variation across markets, it points to investors adjusting to tougher conditions rather than benefiting from a significant drop in home prices.”

Where flippers can prosper—or not

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

Pittsburgh—the metro with the highest return on investment—trounced Austin, TX, 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 populations over 1 million) 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 lower-priced 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,” explains Barber. “You can see that in metros like Pittsburgh, Buffalo, and Philadelphia, where strong demand combined with more manageable acquisition costs is helping drive some of the highest returns in the country.”

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

The smallest typical flipper 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 tends to be houses priced in the $100,000 to $200,000 range, which generated typical profit margins of 32%, according to the report.

While common sense might dictate the lower the price of the home, the bigger the ROI, that isn’t 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 that the home needed significant and expensive upgrades.

When it comes to flipping, price is important, but it’s 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 the demand has to be there on the buy side, too.

Pittsburgh, for example, became a “refuge market” back in late 2025, with buyers priced out of other areas surging in seeking value.

The Steel City’s price-per-square-foot appreciation and increased inventory shows that the market is healthy despite the lower entry point, according to Realtor.com data.

Tarasa Hurley, a longtime broker in the area, wrote in a 2025 blog post about what makes the city so attractive for flippers.

“In some cases, a house 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 housing stock in all of the country. We have houses that are easily 200 years old.”

But not all old homes will make the best flip. An investor needs to factor in not only the cost of the home purchase, but the renovation, and then what the house can be sold for in that particular area, which can sometimes vary wildly even from street to street.

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

Very old homes may have underlying structural and foundation issues, need an entire mechanical overhaul to be brought up to code, sewer lines that need to be replaced, and other complex and bank-busting problems.

A vital step in the flipping process—the renovation—requires skilled labor that is getting more difficult to find, as well as much more pricey than it used to be. Hurley notes that contracting is where Pittsburgh shines.

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

Additionally, Hurley says that the city’s major employers, including Google, Apple, and many hospitals, means that workers are always moving in, keeping buy demand up.

Hurley says as long as a flipper is knowledgeable, does their due diligence, and works with local talent, Pittsburgh can be a flipper’s 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 buys

In the flipper world, cash purchases still dominate, with 61.1% of flipped homes purchased with all cash, down slightly from 61.4% the previous quarter, according to ATTOM.

Flipped homes are also taking a bit more time to sell. Nationwide, it took the typical home flipped in the first quarter 165 days to move, up from 160 days the previous quarter and 164 days at the same time last year.

Jason West, who buys homes for cash in Louisville, KY, then resells them (sometimes fixing up, sometimes not), says a bit of saturation has set in and his days on market has “definitely increased.”

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

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