During the quarter, a nationwide total of 53,638 single-family homes and condos were flipped, equivalent to a 5.6% home flipping rate out of all home sales. This is a decrease from the 6.9% rate in the first quarter but unchanged from the year-ago period.
According to the report, homes flipped in the quarter posted an average gross flipping profit of $67,516, or a 48.4% return on investment (ROI) for home flippers. The second-quarter ROI fell to its lowest level since the third quarter of 2015, from 49% in the first quarter and 49.6% in the second quarter of 2016.
The report also found that more than 35% of homes flipped were purchased with financing, the highest level since the third quarter of 2008. That’s up from 33.2% in the first quarter and 32.3% in the prior-year period. Second-quarter financing for flipped homes had total dollar volume estimated at $4.4 billion, compared to $3.9 billion last quarter and $3.4 billion last year.
"Home flippers are employing a number of strategies to give them an edge in the increasingly competitive environment where flipping yields are being compressed," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "Many flippers are gravitating toward lower-priced areas where discounted purchases are more readily available. In markets where distressed discounts have largely dried up, flippers are showing more willingness to leverage financing when acquiring properties, often purchasing closer to full market value and then relying more heavily on price appreciation to fuel their flipping profits."
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Home flipping hits 2-year high
Fewer homes were flipped during the second quarter, but more homes were purchased by flippers with financing, according to the second-quarter US Home Flipping Report released by ATTOM Data Solutions.