The recent shift in the US housing market has forced previously successful home flippers to act quickly to minimize losses.

Since January, rising mortgage rates have reduced buyer demand and lowered home values in key flipping markets such as Phoenix, Las Vegas, and Jacksonville, Florida. (Barber, 2023) Formerly profitable flippers are now rushing to sell and manage their loans amid transforming conditions.

Investors say, “It’s a high-risk, high-reward business — and now we’re facing the high risk, and I’m just praying for break-even.”

Flippers with loans must continue repayments, and higher interest rates increase the cost of holding properties. Their challenges can ripple through the broader market, as investors who once drove prices higher may now accelerate declines.

Most fix-and-flippers are now focused on selling quickly. Few are buying, as undervalued properties are scarce and the market remains unpredictable.

At the beginning of the year, home flipping reached a record high, accounting for 1 in 10 sales and surpassing figures from the previous housing bubble, according to Attom, a data provider in Irvine, California. Although flipping remains common, it fell to 8.2% of sales in the second quarter of 2023. (Team, 2023)

Conditions have worsened, with mortgage rates nearing a 20-year high. Demand has declined rapidly in Sun Belt cities such as Phoenix, Jacksonville, and Atlanta, where the affordability was already a concern. (Housing affordability worsens in Atlanta, especially in lower-income and suburban areas, in 2025) Fix-and-flippers accounted for 14% of sales in these markets in recent months, but this figure has declined since July and August, according to Attom. (Stuart, 2023)

In Phoenix, property investors have cut prices in response to the unexpected slowdown, resulting in significant losses for many.

Larger losses are likely, and shrinking profit margins have become a major concern for full-time flippers.

As an investor, I provide hard-money loans at interest rates of 10% to 14%. Deciding whether to wait or reduce prices remains difficult, as both options entail costs.

Most investors are still paying back their loans, according to Matt Prosory, RI/Broker at Level 4 Funding, a hard-money lender in Phoenix, Colorado, and Texas. The default rate was 1.25% but has risen to 2.5% in the last two months. Still, that’s lower than before the pandemic. (Glowacki & Brelih, 2024)

Matt noted that flippers offering well-renovated, move-in-ready homes will stand out in the current market. However, those who overpaid and anticipated continued price increases will confront obstacles.

“Lots of them, in hindsight, were making bad buys. Anybody flipping right now must look closely at the property pricing: Price it to sell. Today is not the time to get greedy.

Phoenix flippers are maintaining perspective, recognizing that gains over the past two years have exceeded current losses. Many are now relinquishing some of those earlier profits.

I ask flippers whether the business is ending or simply slowing. In Phoenix, profits continue to decline. Reality TV shows and seminars have attracted buyers who view flipping as an easy path to wealth. Currently, auction prices are nearly equal to retail (MLS) prices, making home purchases less advantageous. (Investor Home Purchases Are Down Over 40% in Sun Belt Pandemic Boomtowns, 2023)

Flippers may benefit from reassessing the market before proceeding with their next investment.

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493

References

Barber, R. (May 9, 2023). Home Flipping Plummets Across U.S. in 2023 as Profits Slump Again. ATTOM. https://www.attomdata.com/news/most-recent/home-flipping-plummets-across-u-s-in-2023-as-profits-slump-again/

Team, A. (September 20, 2023). Home Flipping Activity Drops As Profits Rise In Q2 2023. ATTOM. https://www.attomdata.com/news/market-trends/flipping/attom-q2-2023-u-s-home-flipping-report/

(November 18, 2025). Housing affordability worsens in Atlanta, especially in lower-income and suburban areas. JPMorgan Chase Institute. https://www.jpmorganchase.com/institute/all-topics/community-development/housing-affordability-worsens-in-atlanta-especially-in-lower-income-and-suburban-areas

Stuart, C. (December 12, 2023). Home Flipping Activity Drops As Profits Rise In Q3 2023: ATTOM Report. National Mortgage Professional. https://nationalmortgageprofessional.com/news/home-flipping-rates-decline-profits-rise-q3-2023-attom-report

Glowacki, J. & Brelih, J. (2024). Milliman Mortgage Default Index: 2023 Q4. Milliman. https://www.milliman.com/en/insight/milliman-mortgage-default-index-2023-q4

(November 8, 2023). Investor Home Purchases Are Down Over 40% in Sun Belt Pandemic Boomtowns. Redfin. https://d1io3yog0oux5.cloudfront.net/_807a9e47ae1828554fc2c094b625c4b2/redfin/news/2023-11-09_Investor_Home_Purchases_Are_Down_Over_40_in_Sun_1004.pdf