Due to the doubling of high home prices and high interest rates, housing volatility has weakened recently. But the situation may be changing, as a new report shows that profit margins are rising for the first time in nearly two years.
The average home equity yield hit 25.4% in the first quarter of 2026, up from 24.7% in the previous quarter, marking its lowest point since 2008, according to the quarterly home equity report from real estate data analytics firm ATTOM.
“The first increase in immediate returns in nearly two years is a welcome sign for investors,” ATTOM CEO Rob Barber said in a statement.
“The market remains more competitive than it has been during high-yield years, but this quarter’s earnings suggest conditions may be stabilizing. Success still depends heavily on local market volatility, as some metros generate strong returns while others remain difficult areas to turn around profitably.”
The last time there was a quarter-to-quarter in early 2024 when the average national investment return was around 35%. The increase seen last quarter—albeit less than a percentage point—ends seven consecutive quarters of decline.
For domestic flyers, it may indicate a welcome change from recent trends.
As median home sales prices peaked last year, the average investor saw their net profit—the difference between the median resale price and the median price originally paid—shrink to just $65,981, down from $77,000 last year, according to ATTOM.
So what causes the small increase? Is it all about taming home prices? ATTOM’s Barber doesn’t say so.
“While some price reductions may help margins, the data suggests that these increases are more about stability than market volatility,” Barber tells Realtor.com®.
“Returns are still below last year’s levels, and due to the long durations and wide variability across markets, it is pointing to investors to adapt to tighter conditions rather than benefit from a sharp drop in house prices.”
Where flippers can thrive—or not
Profits have varied widely across the country, with some metropolitan areas posting strong profits while many Texas markets posted only modest gains, according to the report.
Pittsburgh—the metro with the highest return on investment—outranked Austin, TX, which had the least. It’s no coincidence that Pittsburgh has a median affordable listing of $250,000, while Austin’s is $475,000. When it comes to responsiveness, price matters.
The largest cities (with more than 1 million people) had the largest rates of turnover, in order: Pittsburgh (85.9%); Buffalo, NY (84%); Virginia Beach, VA (74.9%); Baltimore (65.9%); and Philadelphia, (62%).
“In low-price markets, investors have more room to create value because their upfront costs are lower, but consumer demand remains strong, especially among price-conscious buyers,” Barber explained. “You can see that in metros like Pittsburgh, Buffalo, and Philadelphia, where strong demand combined with manageable acquisition costs help generate some of the highest returns in the country.”
Strong profit margins are often collected in the Lone Star State. While the country was in the spotlight during the COVID-19 crisis, prices have skyrocketed since then.
The smallest average 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 homes priced between $100,000 and $200,000, which generate average profit margins of 32%, according to the report.
Although common sense may dictate the lower the house price, the greater the ROI, this is not always the case.
Flipped homes originally purchased for less than $50,000 often lose money in the first quarter, resulting in a typical loss of 14%—perhaps because the lower price means the home needs significant and expensive improvements.
When it comes to volatility, price is important, but it is not the only factor that determines whether a profit can be made or not. Some metros—like Baltimore—have a lot of cheap, run-down housing, but the demand has to be there on the buying side, too.
Pittsburgh, for example, became a “refuge market” back in late 2025, when buyers were priced out of other areas in search of value.
The Steel City’s price-per-square-foot appreciation and increasing inventory indicate that the market is healthy despite the low entry point, according to Realtor.com data.
Tarasa Hurley, a longtime dealer in the area, wrote on the 2025 blog about what makes this town so attractive to flippers.
“In some cases, a house can be bought for as little as $20,000, renovated for $50,000, and sold for $160,000,” he wrote. “This high profit opportunity is fueling a frenzy that attracts both reputable developers and opportunistic flippers looking to make a quick profit with minimal effort.”
He tells Realtor.com, “We have some of the oldest homes in the country. We have homes that are easily 200 years old.”
But not all older homes will make the best flip. An investor needs to consider not only the cost of buying a home, but the maintenance, and then what the house can be sold for in that area, which can sometimes be different even from street to street.
Hurley says: “When the flippers come in and think ‘I’m going to make this look good,’ it doesn’t go well.
Older homes may have basic structural and foundation problems, mechanical repairs to code, sewer lines that need to be replaced, and other complex and remedial issues.
A key step in the browsing process—repair—requires skilled labor that is harder to find, and more expensive than ever before. Hurley notes that contracting is where Pittsburgh shines.
“We have a lot of people who know how to do things here,” he said. In other places, that level of knowledge doesn’t exist or is too expensive.”
In addition, Hurley says the city’s major employers, including Google, Apple, and several hospitals, mean workers are constantly coming in, keeping shopping 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 are a kind of unicorn,” he said. But just because you can buy a house for $50,000, doesn’t mean you should.
All purchases are cash
In the flipper world, cash purchases still dominate, with 61.1% of flipped homes purchased with all cash, down slightly from 61.4% last quarter, according to ATTOM.
Flipped homes also take longer to sell. Nationwide, it took the average home to be flipped in the first quarter 165 days, up from 160 days last quarter and 164 days at the same time last year.
Jason West, who buys homes for cash in Louisville, KY, and then resells them (sometimes fixing them up, sometimes not), says less traffic has started and his days on the market have “definitely increased.”
He says: “I think we’ve been pretty screwed over the last few years. Now we’re like, ‘What’s going on? This house is not going to sell.’ They move, they just take a long time.
“I think everyone is getting by as easy as it used to be.”
