Home flipping activity[i] – which is the act of buying a property with the intent to sell in a short period of time for a profit – has increased steadily over the last eight years. By the fourth quarter of 2018, the flipping rate in the U.S. reached 10.6 percent of all home sales. While this is down from the cycle-high of 11.1 percent earlier that year, home flipping is seasonal. Accounting for this seasonality, the flipping rate in the fourth quarter of 2018 was the highest rate for a fourth quarter since we started tracking home flipping back in 2002.
At the same that we’re seeing flipping rates hover near historic highs, we also find that flippers are making healthy returns[ii] on their projects. Nationally, the median annualized return on flipping was flat year-over-year to just over 40 percent in the fourth quarter of 2018.