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Missed out on a possible dream home? Don't worry, you may have to wait just a few months before it hits the market again. Of course, you'll likely have to pay a slightly higher price.

Roughly 10% of US homes purchased in the first quarter of 2022 were the result of a "flip" -- the practice of buying and selling a new home within a year, most often after renovations -- marking the highest level since 2000, according to real estate database ATTOM.

Buy the Flip

While the emotional value of a home may be incalculable, this is a story best told in numbers. Through the first quarter of the year, 9.6% of home resale transactions, good for some 114,000 single-family houses and condos, were the result of a flip, ATTOM reports. That's about double the nearly 5% rate from the same period last year, and up from Q4 2021's 6.9% (overall, flipping has been on the rise for five straight quarters).

The trend, in particular, is striking the housing market in bustling up-and-coming metro areas:

  • Nearly 19% of all home sales in Phoenix were flips in the first quarter. Rounding out the top five: Charlotte (18%), Tucson (16.2%), Atlanta (16.2%), and Jacksonville (16%). Olympia, Washington came in last place among metro areas analyzed by ATTOM, with flips representing just 4.4% of home sales.
  • Rising costs of building materials makes flipping homes much cheaper and easier than building a new one. In May, new home construction fell about 15% to the lowest levels in a year, according to US Department of Commerce Data, while a Freddie Mac report from last year pegged a national housing shortage at 3.8 million.

Fixed-Up: The median price of a flipped home during the period was $327,000, a significant payday over the median investor purchase price of $260,000. Meanwhile, nearly two-thirds of all flipped homes were completed with cash. Blame those deep-pocketed private equity groups next time you get outbid.

On the Flip Side: But... the market seems to be cooling. Profit margins for flippers fell in Q1 in nearly three-quarters of analyzed metro areas as mortgage rates rise and demand cools. Whether a bubble is popping is tough to say -- flipping last peaked in 2005 at 8.2%, according to ATTOM, when levels reached nearly 20% in Las Vegas, Phoenix, and parts of Florida. It may be safer to keep flipping dreams relegated to the land of mindless reality TV.