When Mortgage Rates Rise Flipped Homes Fall Flat

Although flipped homes continue to attract more online interest and sell faster than other older homes, new Realtor.com^® analysis finds  pricing power and returns have softened

AUSTIN, Texas, Dec. 18, 2025 /PRNewswire/ -- Renovated homes are still attracting more online interest and selling faster than other older homes, but the long-standing fix-and-flip advantage has weakened significantly as higher mortgage rates reshape buyer demand and pricing power, according to a new report from Realtor.com^®. This analysis follows an earlier in-depth analysis of fixer-uppers on the market, which found fixer-uppers are priced 54.2% lower than the median single-family home in the U.S.

"Higher mortgage rates change the math for buyers and sellers alike," said Joel Berner, senior economist at Realtor.com^®. "Renovated homes still catch buyers' eyes, but financing the cost of those improvements at today's rates is less appealing to today's price-sensitive shoppers. That's why we're seeing the performance gap between flipped homes and other older homes shrink compared with 2021."

Flipped Homes Look Typical, But Carry a Steeper Price Per Square Foot

Nationally, flipped homes look similar to other older homes in terms of bedroom and bathroom counts and overall price range, with median listing prices of about $380,000 for flipped homes compared with roughly $385,000 for other older homes. However, flipped homes tend to be smaller, carry a higher price per square foot, and are more likely to be located in urban areas—about 40.4% of flipped homes are in urban ZIP codes versus 32.1% of other older homes.

Despite these similarities, renovated homes still outperform on visibility and speed. In October 2025, flipped homes received about 6.5% more page views per listing on Realtor.com^® and spent roughly 10 fewer days on the market than comparable older homes. Yet this edge is far narrower than it was during the low-rate environment of 2021, when flipped homes drew 25.0% more page views per listing than other older homes and moved just as quickly as the rest of the market.

Flipped Homes Sales Performance Faces Headwinds

Even with strong online interest, flipped homes are facing headwinds when it comes to final sale prices. Among flipped homes listed in July 2025 that have since sold, the median property sold at an 8.3% discount from its highest post-renovation listing price. Comparable older homes sold at a much smaller 2.9% discount. This contrasts sharply with 2021, when flipped homes sold at a median discount of just 0.9% from peak list price, similar to the 0.4% discount seen for other older homes.

Fix-and-flip activity overwhelmingly takes place below the median listing price of each metro. The typical flipped home was purchased at just 51.4% of its metro's median single-family home price and, even after renovation, was listed at 87.8% of the median.

What is the "Flip Factor"?

To better capture how far renovations move homes up-market, this report debuts a new metric, the "Flip Factor." Nationally, the Flip Factor is 36.4 percentage points—the difference between the typical flipped home's price as a percentage of the median price before renovation and after it is listed.

Only eight U.S. metros saw the median flipped home listed above the local median price, underscoring how rare it is for renovations to push homes meaningfully beyond the middle of the market. The highest Flip Factors are concentrated in more affordable metros, where lower entry prices give flippers greater room to add value. Pittsburgh stands out, with flipped homes moving from well below the median to more than 6% above it, while Detroit is notable for combining a large supply of flippable homes with strong up-market movement after renovation.

Affordable Markets See Biggest 'Flip Factor' or Sought-After Price Jump Relative to the Market

Apart from Pittsburgh and Cape Coral, FL, which were in the top 10 for Flip Factor, the rest of the markets where flipped homes are listed above the market median are large and generally expensive Western markets. Only Seattle has a Flip Factor above the national average. Though the purchase prices are higher, both in absolute terms and as a percentage of the median, the West is home to a younger housing stock that ends higher up-market when renovated.

Markets Where Flipped Homes Are Listed for Above the Market Median Price

"We're in a market where renovation alone no longer guarantees pricing power," said Berner. "Flipped homes still draw attention and tend to move faster than other older homes, but sellers are increasingly having to recalibrate their expectations as higher mortgage rates constrain what buyers can afford."

Methodology

For listing characteristics and metro-level performance of renovated homes, homes are collected from Realtor.com listings active during October 2025. Only single family homes at least 20 years of age are considered, and to be tagged as a flip, these three things must also be true:

1. The home must have been purchased within the two years prior to it being currently listed, and
2. its current listing price must be at least 20% higher than its previous purchase price, and
3. the large language model must confirm from its listing description that it was indeed recently renovated.

For sales performance, the same criteria are applied to listings from July 2025 that had a publicly recorded sale by September 2025. Flip factor is calculated using the property and overall median listing prices for single family homes in the metro where the flipped home is located during the month of its pre-renovation sale and then again during the month of its post-renovation listing.

About Realtor.com^®
Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com^® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media contact: Mallory Micetich, [email protected]

SOURCE Realtor.com