Is House Flipping Becoming Less Profitable?

For years, real estate investors have enjoyed success by flipping houses. But these days, profit margins for house flippers are shrinking.

ATTOM Data reports that almost 95,000 homes underwent a flip during 2021's third quarter, representing 5.7% of all sales. But the average gross profit on house flips was just under $69,000 during that quarter, down 1.6% from the same time frame one year prior. Furthermore, house flippers' return on investment fell to 32%, the lowest level since early 2011 and a sizable drop from a year prior.

There are several factors that can explain why house flipping may be sluggish right now. For one thing, property values are up across the board.

Source Fool.com