MortgageReal Estate

ATTOM: Lending for home flipping climbs to 11-year high in 2018

However, home flipping is expected to slow down as mortgage rates cool off

Throughout 2018, home flip lending volume rose by 8%, coming in at an 11-year high, according to ATTOM Data Solutions' latest U.S. Home Flipping Report.

"The share of homes flipped in Q4 2018 that were purchased by the flipper with financing represented 36.4% of all homes flipped in the quarter, down from 39.1% in the previous quarter and down from 39.5% in Q4 2017, to a two-year low,” ATTOM writes in its report.

According to ATTOM, 207,957 U.S. single family homes and condos were flipped in 2018, retreating 4% from 216,537 in 2017.  

These homes represent 5.6% of all single-family home and condo sales during 2018, holding steady from the 5.6% of all sales in 2017.

This means that Americans spent $19.9 billion on financed home flip purchases, rising from $18.5 billion in 2017.

Interestingly, the average home flipping gross profit was $62,000, representing an average 41.9% return on investment.

But things are expected to slow down a bit.

“With mortgage rates remaining strong and people staying in their homes longer, we have started to see a bit of a flipping rate slowdown,” ATTOM Data Solutions Chief Product Officer Todd Teta said. “However, this isn’t to say home flipping is going away. The market is still ripe with investors flipping and bargains still await, especially in the lowest-priced areas of the country, where levels of financial distress remain highest.”

According to the report, among the 53 large metropolitan areas analyzed, those with the highest share of completed flips sold to all-cash buyers included Denver up 53.7%, Providence, Rhode Island up 51.8%, Seattle up 51.8% San Diego up 51.6% and San Francisco up 50.8%. 

NOTE:  For this report ATTOM Data Solutions analyzed sales deed data.

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