A 25.4% Margin Against a 33% Cost Load

ATTOM reported that the typical flip earned a 25.4% gross return in the first quarter of 2026. That sounds workable.

Now read ATTOM's own footnote on that number. They say gross profit does not include rehab costs and other expenses, "which flipping veterans estimate typically run between 20 percent and 33 percent of the property's after-repair value."

Put those two facts next to each other.

That is the whole article. Everything below is detail.

The margin picture is not uniform

Three of our five states saw gross profit fall year over year. Two went up. Here is where things stand.

Georgia is the most active flipping market in the country, and its returns improved. North Carolina lost $23,000 of gross profit per deal in one year and gave back 11.4 points of ROI — the worst of the five.

Two more findings from the same report worth pinning to your wall:

• Flips bought under $50,000 lost money. Typical loss: 14%. Cheap does not mean safe.
• The best returns came from the $100,000 to $200,000 purchase band — about 32% typical margin. That is the sweet spot right now.

One honest note on that table. Tennessee and Virginia show ROI near 50%, roughly double the national figure. That is real in ATTOM's data and comes from low purchase prices, but remember it is gross. Rehab, insurance, taxes, and interest all come out below those numbers.

Prices are going flat, not falling off a cliff

You may have read that the market is collapsing. The data does not say that. It says something more dangerous for a thin deal: prices are going nowhere.

Forecasts, clearly labeled as forecasts:

• The Mortgage Bankers Association projects national home price growth of +0.9% in Q3 2026 and +0.4% in Q4, then under 1% through 2027.
• Fannie Mae projects +2.3% for 2026 and +1.0% for 2027.
• NAR projects +4%. That is the outlier of the three and the least conservative.

For underwriting, use the conservative end. If you need appreciation between purchase and exit to make a deal work, you do not have a deal. You have a bet.

Meanwhile, 30-year rates sat at 6.58% in Freddie Mac's July 23 survey, and no major forecaster sees below 6% in 2026 or 2027.

Nearly six in ten sellers miss their opening number

In June 2026, 59.5% of homes sold below their original list price. The typical home sold at 96.4% of original list.

Your markets are running harder than the country on price cuts. National share of listings with a price cut was 18.8% in June. Here is the same month locally.

Read the right-hand column carefully, because it cuts against the doom story. Price cuts are less common than a year ago almost everywhere. Sellers are pricing correctly out of the gate instead of listing high and cutting later. That is a market finding its level, not a market breaking.

Richmond is the exception in both directions: cuts got more common, but homes there sell faster than anywhere else in the group — median days on market fell about 14% year over year, and single-family sellers are still getting 101.3% of original list.

The exit takes longer than your budget thinks

Median days on market in June 2026: Nashville 53, Atlanta 52, Charlotte 51, Charleston 51, Raleigh 50, Columbia 43, Richmond 37.

And every MLS in our footprint that reports closed-sale days on market shows it rising: Charleston up 11.6%, Richmond up 15.0%, Georgia statewide up 8.0%, Columbia up 6.8%, Charlotte up 6.8%.

Here is the trap. ATTOM's 165 days is purchase to resale. Your metro's 51 days is list to contract. Those are different clocks, and the second one sits inside the first. Fifty-one days on market plus a thirty-day close is eighty-one days &mdash by itself about half of a 165-day project, spent entirely on the exit.

Most rehab schedules do not leave room for that.

Yes, you are probably getting a real appraisal

A lot of investors assume appraisal waivers have made valuation risk go away. Not on a purchase.

• On purchase loans, appraisal waivers run about 12% at Fannie Mae and 20% at Freddie Mac. A full appraisal is still required roughly four times out of five.
• There are zero waivers above 90% LTV at either agency. Your buyer putting 5% down is getting an appraiser.
• Waivers cluster in low-LTV refinances, not purchases. That is not your exit.
• NAR reports 6% of contracts were delayed by appraisal issues in its May 2026 survey, and 24% of buyers waived the appraisal contingency — up sharply from 16% a month earlier.

And the appraisal is getting stricter in a flat market. Fannie Mae requires appraisers to make time adjustments to comps based on actual market movement, and to classify the trend as increasing, stable, or declining. Freddie Mac requires at least twelve months of data behind that call. In 2026 Fannie also gave appraisal management companies access to Collateral Underwriter, the tool that flags overvaluation and weak comp selection.

Translation: an optimistic ARV is more likely to get challenged this year than last year.

How to underwrite ARV in this market

The bottom line

Flipping returns actually ticked up in the first quarter of 2026, ending seven straight quarters of decline. This is not a crash.

But the cushion is thin, prices are going flat, and the exit is slower. That combination does not punish bad deals. It punishes imprecise ones. The number you write on the offer is now the only real protection you have.

Data sources: U.S. Census Bureau and HUD; National Association of Realtors; National Association of Home Builders; John Burns Research & Consulting; Freddie Mac Primary Mortgage Market Survey; ATTOM Data Solutions; Redfin; Realtor.com; U.S. Bureau of Labor Statistics; and the state and local REALTOR® associations named above. Figures were current as of publication and change frequently. This article is market commentary for informational purposes only. It is not a loan offer, an appraisal, investment advice, tax advice, or insurance advice. Loan terms and approval are subject to underwriting by REI Transactional.