Home flipping, the business of fixing and re-selling homes for a profit, is getting tougher.
"Home flipping remained active across the U.S. in the second quarter of 2025, but investor profits continued to shrink, with the typical gross return on investment dropping to 25.1 percent — the lowest level since 2008," says Attom in its second-quarter flipping report. Attom also said the median purchase price for a flipped home climbed to a record $259,700.
Worse, a lack of homes in most markets puts flippers in direct competition with first-time home buyers. "Limited inventory and elevated home prices fueled intense competition between investors and first-time buyers, particularly for affordable properties," continues Attom.
Of course, as with all trends in the housing markets, there are enormous variations in conditions across the different regions, states and cities within the United States. And Attom singles out Georgia as the top state for flipping, with activity particularly high in Atlanta, Macon, and Warner Robins.
It's true that, this year, home prices have eased lower, and housing inventory has improved a little. However, new pressures on renovation costs might well balance or even outweigh those gains.
Flipping Costs That Are Set to Rise
Earlier this month, we published How Tariffs Could Affect Home Construction and Renovation Costs. The same price pressures that affect renovations will also push up budgets for flipping projects.
We reported that there is "a 10% tariff on imported softwood timber and lumber, and 25% on upholstered wooden products, kitchen cabinets and vanities. Those 25% rates are scheduled to step up in the coming months, reaching 50% by January 1, 2026. Canadian softwood lumber, which accounts for roughly 85% of America's imports of these products, carries a 14.5% tariff, but the Commerce Department says it intends to more than double that to 34.5% by the end of this year."
Ultimately, the government may be correct in arguing that tariffs will repatriate some jobs that have gone offshore over the last several decades. However, that may be a very long-term benefit.
It takes at best months to find, build and equip premises. It takes years to train people with the skills a craftsperson needs. And it typically takes decades to grow trees for lumber. "Timber farmers plant trees, thin them out every few years to allow the better trees to grow and then harvest when trees are around 25-35 years old. They then harvest, replant and start the process all over," says the Texas Farm Bureau.
In our article, we acknowledged that the effects of tariffs were taking longer to feed through to consumers and end users than many economists expected. And it may be that their impacts will be smaller than some thought.
But, in the long run, it's likely tariffs will increase costs for flippers and renovators.
Labor Costs
The Economic Policy Institute concurs. "If the administration follows through on its goals of deporting 4 million people over four years, ... employment in the construction sector will drop sharply: U.S.-born construction employment will fall by 861,000, and immigrant employment will fall by 1.4 million," it says. It adds New York to the Baker Institute's list of most-affected states.
Tariffs and deportations could deliver a double whammy to flippers, as well as to homeowners wanting to commission home improvement projects. Meanwhile, a hollowing out of the construction industry's labor force should slow home building, creating extra demand for flipped properties and renovation work.
