Home flipping profits are shrinking, with a 25.1% return on investment in the second quarter, the lowest since 2008. Gross profits fell 13.6% to $65,300, as rising home prices increase acquisition costs for investors. Despite the decline, 78,621 homes were flipped in Q2, accounting for 7.4% of all home sales.

Median prices for flipped homes hit a record high at $259,700, with sales prices averaging $325,000. A shortage of homes on the market and increased competition drive up acquisition costs for investors. Home flipping has become less profitable over the last decade, with a 62.9% return on investment in 2012.

Sales of previously occupied U.S. homes have declined due to rising mortgage rates since early 2022. Properties are taking longer to sell, leading to a higher inventory of homes on the market. Real estate investors are taking up a larger share of home sales, with 33% of all homes sold in Q2 bought by investors, the highest in at least five years.

Read more at Yahoo Finance: Profit margin on flipping a home is at a 17-year low due to high prices