The prices of homes in the United States have gone through a surge that tops most periods in the past several decades. It is not even matched by the huge run-up in 2005 and 2006, which then collapsed in 2007 and 2008 when the financial crisis that prompted the Great Recession undermined subprime variable rate mortgages. In some markets, housing prices fell by over 40% and foreclosures exploded.
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The current market has posted several months during which home prices rose by 20% year over year nationwide, according to the S&P Case-Shiller price index. In several markets, including Phoenix and Tampa, the increase has been over 30% some months.

In several smaller markets, the demand for housing has pushed prices even higher. Boise is an example. For several months, home prices were 50% over the same month the year before.

The housing market has begun to cool as the Federal Reserve has pushed up interest rates. A 30-year-fixed mortgage rate has gone from 3% a year ago to over 6% today. Price increases in some metropolitan areas have slowed. In a few places, prices have begun to fall. The days of bidding wars for homes have ended.

Some people continue to make money in the housing market. According to a new report from real estate research firm ATTOM, home flipping in some metros is an extremely good way to make money. ATTOM lays out its conclusions in Home Flipping Dips Across U.S. During Second Quarter of 2022 While Profits Grow.

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ATTOM reports that 115,198 homes were flipped in the second quarter of the year. That was 8.2% of all home sales in the period. Rick Sharga, executive vice president of market intelligence for ATTOM, commented, “The second quarter was another strong showing for fix-and-flip investors. The total number of properties flipped was the second-highest total we’ve recorded in the past 22 years, and the median sales price of a flipped property – $328,000 – was the highest ever.”

In some markets, the return on investment (ROI) for home flippers was over 100% in the second quarter. Most of these were markets with relatively poor populations and relatively low home prices, compared to national numbers. The home flipping ROI in Buffalo was 133.3%. It was 127.3% in Pittsburgh. These were followed by Lake Charles, La., at 125.5%; Scranton, Pa., at 109.9%; and Harrisburg, Pa., at 96%. Notably, most of these metros are in the same geographic area.

High mortgage rates may undermine the home flipping market, but it has not happened yet.

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