Q1 2025 Commentary

The U.S. rental market has cooled off since the red-hot heights of the Pandemic Housing Boom when national multifamily rents surged +16.4% and single-family rents jumped +13% year-over-year in the early months of 2022. However, the slowdown has not been uniform. Last year, many U.S. rental markets saw multifamily rent growth continue to lag behind single-family rental growth, with some regions even seeing outright declines. Early data for 2025 suggests this trend is continuing.  According to LendingOne’s analysis, nationally aggregated multifamily rents rose +2.7% year-over-year in January 2025, while single-family rents climbed +4.4%.  This growth gap indicates that demand for single-family rentals remains elevated, while multifamily rent growth faces more downward pressure—with the strength of this trend varying greatly by market.  To see which multifamily and single-family rental markets have seen the most rent growth in the last 12 months, LendingOne analyzed data from the Zillow Observed Rent Index (ZORI). Using the ZORI time series data, LendingOne analysts calculated the year-over-year shifts in rent for single-family and multifamily properties by metro area. Top-line findings from LendingOne’s latest rent analysis: Single-family rental growth, while subdued compared to the Pandemic Housing Boom days, continues to outperform multifamily rental growth across most U.S. markets.  Small and mid-sized markets in the Northeast and Midwest are seeing the strongest rental growth—for both multifamily and single-family properties. The weakest rental markets are concentrated in the Southeast, with markets like Austin, Cape Coral, and San Antonio experiencing outright multifamily rent declines since January 2024.   National Rent Change: 12-Month Shift   Change in Metro-Level SFR Rents Between January 2024 and January 2025     Top Metros for Single Family Rent Growth Among the 200 largest metros with sufficient data, these are the 20 metros with the highest single-family rent growth from January 2024 through January 2025: Atlantic City, NJ: +14.4% Manchester, NH: +10.9% Reading, PA: +10.4% Huntington, WV: +9.7% Salinas, CA: +9.6% Santa Cruz, CA: +9.6% Flint, MI: +9.4% Green Bay, WI: +9.3% Kalamazoo, MI: +9.1% Evansville, IN: +9.0% Norwich, CT: +8.3% Topeka, KS: +8.1% Fort Smith, AR: +7.9% Salisbury, MD: +7.7% St. Louis, MO: +7.7% Cleveland, OH: +7.6% Charleston, WV: +7.6% Santa Maria, CA: +7.4% Youngstown, OH: +7.4% Merced, CA: +7.2% Atlantic City, NJ stands out as the strongest single-family rental market, with a remarkable year-over-year rent growth of +14.4%. Many of the city’s Northeastern neighbors, including Manchester, NH (+10.9%) and Reading, PA (+10.4%), join it at the top of the ranks. This region is strong due to tight housing inventory, limited new construction, expensive neighboring cities, and home price appreciation pushing up rental demand. The Midwest is also performing well, with cities like Flint, MI (+9.4%) and Kalamazoo, MI (+9.1%) seeing strong single-family rent growth. The region's relative affordability and increasing demand for rental properties as more people seek budget-friendly housing options amid rising homeownership costs puts upward pressure on rent growth.  Notably, select areas in California are seeing strong single-family rent growth as metros like Salinas (+9.6%) and Santa Cruz (+9.6%), due to limited housing supply and high demand.   Change in Metro-Level Multifamily Rents Between January 2024 and January 2025 Top Metros for Multifamily Rent Growth Among the 200 largest metros with sufficient data, these are the 20 metros with the highest multifamily rent growth from January 2024 through January 2025: Reading, PA: +12.8% Atlantic City, NJ: +12.0% Lynchburg, VA: +9.5% Erie, PA: +9.1% Duluth, MN: +9.0% Hartford, CT: +8.8% Shreveport, LA: +8.6% South Bend, IN: +8.6% Worcester, MA: +8.5% Tuscaloosa, AL: +8.3% Salinas, CA: +8.2% Bremerton, WA: +8.1% Bridgeport, CT: +8.0% Fayetteville, AR: +8.0% Peoria, IL: +7.9% Montgomery, AL: +7.8% Norwich, CT: +7.8% Charleston, WV: +7.8% Jackson, MS: +7.8% Lansing, MI: +7.7% The Northeast and Midwest are home to the strongest markets for year-over-year multifamily rent growth. Reading, PA leads with +12.8% year-over-year rent growth, followed by Atlantic City, NJ (+12.0%) and Lynchburg, VA (+9.5%).  Meanwhile, the weakest rental markets—for both multifamily and single-family rent growth—tend to be those that overheated during the pandemic boom times. In metros across Texas, Florida, Colorado, and Utah, a large wave of new apartment and single-family construction was delivered in 2023 and 2024, largely driven by multifamily projects and a homebuilding frenzy financed during the period of ultralow interest rates. Some of the downward pressure on rents in these markets could ease as more new inventory is absorbed.  That being said, even in the softer rental markets, single-family rental growth is still faring better than multifamily with 26 metros seeing outright declines in multifamily rents from January 2024 to January 2025, versus only two markets seeing single-family rents drop in that time, according to LendingOne’s analysis.  Big Picture: This year is positioned for another year of single-family rent growth outpacing multifamily rent growth in both the strongest rental markets in the Northeast and Midwest, as well as softer markets across Texas and Florida, where new construction has put downward pressure on rent growth.    Note: The ZORI index is a repeat-rent index that tracks typical market rates by averaging listed rents in the 35th to 65th percentile range, weighted to reflect the full rental housing stock rather than just current listings. 

During the Pandemic Housing Boom, a surge in housing demand, low mortgage rates, and rapid home price appreciation spurred a wave of home flippers into the market, as short hold times and rising values made quick resales highly profitable. Since then, however, higher borrowing costs, compressed margins, and slower price growth have significantly slowed U.S. home flipping activity. Despite strained housing affordability, certain metro areas can still be considered great markets for home flippers—particularly in those where home prices are still rising, inventory remains tight, and flipper return potential remains strong. To identify the best markets for home flipping in 2025, LendingOne evaluated the following data for 183 metro area housing markets: Year-over-year change in home prices between December 2023 and December 2024, according to the Zillow Home Value Index Year-over-year change in active housing inventory for sale between January 2024 and January 2025, as measured by our analysis of Realtor.com data Active housing inventory for sale at the end of January 2025 compared to January 2019, as measured by our analysis of Realtor.com data The typical gross profit on home flips in Q3 2024, according to ATTOM Data The typical gross return on investment (ROI) on home flips in Q3 2024, according to ATTOM Data LendingOne’s methodology logic is based on the idea that the tightest housing markets are those where active inventory remains well below pre-pandemic 2019 levels and home prices are rising at an elevated year-over-year rate. These conditions create an environment where flippers are most likely to see appreciation while holding a property this year. To validate this, we also analyzed home flip success in the latest reported quarter to ensure flippers in these markets are still turning a profit. Let’s take a look at the top 10 markets for home flippers in 2025.   #1 Rochester, NY Typical home value: $252,247 Year-over-year home price change: 8.2% Typical flipping gross profit: $95425 Q3 2024 Gross ROI: 78% Inventory compared to pre-pandemic 2019 levels: -58% Rochester’s housing market has emerged as the top spot for home flippers in 2025, thanks to surging buyer demand and extremely tight inventory. The city’s relatively affordable home values, steady economic growth, and proximity to natural attractions like the Finger Lakes and Niagara Falls have made it one of the hottest real estate markets in the country. The market is also supported by a robust local economy with companies like Wegmans Food Markets and Paychex employing thousands of residents. With these factors combined, Rochester is poised to offer home flippers strong returns in a thriving, evolving market.   #2 Rockford, IL Typical home value: $195,139 Year-over-year home price change: 9.7% Typical flipping gross profit:: $54250 Gross ROI: 47% Inventory compared to pre-pandemic 2019 levels: -63% Rockford, IL is an ideal market for home flippers in 2025, with the typical home valued at under $200,000 according to the December Zillow Home Value Index. Its affordable housing is in sharp contrast to the Chicago metro’s steep prices, making it an attractive option for those seeking a move less than two hours away. With hybrid work models here to stay, many are now open to living further from city centers to expand their homebuying options. Rockford has benefited from this trend, making it a strong market for profitable home-flipping activity.   #3 Atlantic City, NJ Typical home value: $361,464 Year-over-year home price change: 7.4% Typical flipping gross profit: $144000 Gross ROI: 83% Inventory compared to pre-pandemic 2019 levels: -58% Atlantic City is an ideal market for home flippers in 2025, with property prices significantly lower than in nearby parts of New Jersey. The city is on a development kick, with infrastructure improvements and a focus on attracting tourism creating strong demand for both short-term rentals and long-term homes. In January 2025, development group DEEM Enterprises announced it’s secured $3.4 billion in funding for a new waterfront community, featuring a Formula 1 raceway and hundreds of green-energy condominiums. Additionally, Atlantic City’s proximity to major metropolitan areas like New York City and Philadelphia makes it an attractive option for commuters seeking more affordable housing while still maintaining access to these urban hubs.   #4 Syracuse, NY Typical home value: $234,398 Year-over-year home price change: 9.9% Typical flipping gross profit: $65000 Gross ROI: 44% Inventory compared to pre-pandemic 2019 levels: -55% Syracuse is a top market for home flippers, offering affordable housing, job growth, and access to nature. The city’s lower housing costs make it ideal for purchasing and renovating properties. Micron’s new megafab in nearby Clay, NY, is set to create nearly 50,000 jobs over the next two decades, driving increased demand for housing. Syracuse also has some of the country’s oldest housing stock, so there are a lot of structures in need of restoration and repair. The city’s proximity to natural landscapes like the Adirondacks and Finger Lakes further enhances its appeal.   #5 Scranton--Wilkes-Barre, PA Typical home value: $205,173 Year-over-year home price change: 6.3% Typical flipping gross profit: $90000 Gross ROI: 100% Inventory compared to pre-pandemic 2019 levels: -47% Scranton, PA, is among the most affordable markets in the country, with a typical home priced at just $205,173, making it a prime location for home flippers seeking value. The city also boasts one of the oldest housing stocks in the country, providing numerous opportunities for renovations and restorations. Scranton’s low property taxes further enhance its appeal, offering homebuyers and investors a cost-effective environment for property investment. Additionally, Scranton’s proximity to major urban centers like Philadelphia and New York City adds to its appeal, as commuters can enjoy more affordable living without sacrificing access to these bustling hubs.   #6 Reading, PA Typical home value: $290,014 Year-over-year home price change: 6.7% Typical flipping gross profit: $95000 Gross ROI: 78% Inventory compared to pre-pandemic 2019 levels: -55% Reading, PA, is a prime Rust Belt market for home flippers in 2025, offering affordable entry costs and strong resale potential. Home prices continue to climb yet remain well below the national average, allowing investors to buy low and sell high. Just over an hour from Philadelphia, Reading’s steady price growth and strong demand mean increasing profit margins for flippers. Despite higher interest rates, buyers continue to find value, making it an ideal location for profitable renovations and quick resales.   #7 Cleveland, OH Typical home value: $229,735 Year-over-year home price change: 6.4% Typical flipping gross profit: $94000 Gross ROI: 78% Inventory compared to pre-pandemic 2019 levels: -46% Cleveland, OH, has become a prime market for home flippers in 2025, with home prices continuing to climb through 2024. Despite this surge, the median home price remains significantly below the national average, offering investors affordable entry points. The city's diverse economy is anchored by massive organizations like the Cleveland Clinic and Cleveland-Cliffs as well as several Fortune 500 companies. Additionally, Cleveland's older housing stock provides ample opportunities for value-adding renovations. With rising property values, a strong job market, and abundant renovation prospects, Cleveland offers substantial profit potential for home flippers in 2025.   #8 Akron, OH Typical home value: $218,294 Year-over-year home price change: 6.3% Typical flipping gross profit: $90500 Gross ROI: 85% Inventory compared to pre-pandemic 2019 levels: -43% Akron, OH, is quickly emerging as a strong market for home flippers in 2025, thanks to its affordability, steady home price growth, and proximity to Cleveland. Akron benefits from the economic and job opportunities of the larger metro area while maintaining a more budget-friendly housing market. With inventory still limited, competition for properties is intensifying, but the lower home prices create room for profitable renovations and strong returns.    #9 Springfield, MA Typical home value: $350,714 Year-over-year home price change: 6.1% Typical flipping gross profit: $140000 Gross ROI: 74% Inventory compared to pre-pandemic 2019 levels: -50% Springfield, MA, stands out as an ideal market for home flippers, particularly because it boasts one of the oldest housing stocks in the region. With limited space available for new development, existing homes are the primary source of market activity, boosting demand for fix and flip projects. The city’s homes are also relatively affordable—sitting well below the Massachusetts average. Flippers in Springfield have opportunities to restore historic homes while investing in the city’s growing market. Additionally, the market’s proximity to larger metropolitan areas like Boston enhances its desirability, drawing buyers seeking affordable housing within reach of major job markets.   #10 Canton-Massillon, OH Typical home value: $203,126 Year-over-year home price change: 7.9% Typical flipping gross profit: $55190 Gross ROI: 45% Inventory compared to pre-pandemic 2019 levels: -42% Canton, OH, is emerging as an attractive market for home flippers, offering a combination of affordable housing and historical charm. Known as the birthplace of the NFL and home to the Pro Football Hall of Fame, the city’s old housing stock presents ample opportunities for renovation and restoration. The local market is experiencing steady home price appreciation, creating strong potential for profitable flips. With inventory levels significantly lower than pre-pandemic levels, demand for homes is high, driving competition. Additionally, Canton’s proximity to Cleveland adds appeal, attracting buyers seeking affordable homes with access to larger job markets.   Big Picture: While home flipping activity has slowed nationally since the Pandemic Boom, there are still strong home flipper markets in Rust Belt cities and smaller metros in the Northeast and Midwest, where affordable housing, rising prices, and tight inventory create profitable conditions for renovations.

The 2025 home flipping environment is active but cautious, with demand for fix and flip properties and a growing focus on rental conversions. However, expectations for growth across all markets remain muted, and regional challenges like inventory, competition, and rising costs impact sentiment.  In this article, you’ll see the full results of our first LendingOne-ResiClub Fix and Flip Survey. Real estate investors that reported that fix and flips were a part of their investment strategy were eligible to respond to the survey, fielded from February 1 to February 19, 2025. ResiClub, our partner for the survey, is a news and research outlet dedicated to covering the U.S. housing market. Our findings reveal that the home flipping market in the Northeast remains particularly hot, as price appreciation, tight inventory, and aging housing stock create investment potential for fix and flip projects. However, home flippers in the region face intense competition for properties and elevated purchase prices.  Topline Findings  1. Home Flipper Sentiment and Intent  Fix and Flip Activity:  89% of home flippers plan to conduct at least one fix and flip in 2025.  64% plan to convert at least one fix and flip project into a rental using the fix-to-rent method.  Market Outlook:  78% describe the demand for fix and flip properties as strong in 2025, with 32% saying "very strong." In the Northeast, 59% of home flippers described demand as “very strong.”  64% of survey participants expect the fix and flip market to stay the same (47%) or weaken (17%) in 2025.  2. Financial Considerations  Renovation Costs:  Home flippers in the Northeast spend the most, with 34% investing over $200,000 per project.  56% of U.S. home flippers say kitchen upgrades provide the best return on investment. 3. The biggest concerns across U.S. markets, according to home flippers  Northeast: Housing inventory is the biggest challenge (34%).  Midwest & Southwest: Competition for properties is reported as the top concern among flippers (31% and 34%).  Southeast: Interest rates are the biggest challenge, with several home flippers specifically noting trouble accessing enough financing for projects  West: Labor and material costs are the top challenge (24%).   How Likely Flippers Are to Conduct a Fix and Flip in 2025   How Many Fix and Flips Investors Complete in a Year   Average Timeline of Project from Purchase to Resale   Renovations with Best ROI   Share of Home Flippers Who Own SFR Properties     Current State of Flippers' Primary Fix and Flip Market     Biggest Challenges Home Flippers Face in Current Market   How Flippers Describe Demand for Flips in Their Primary Market      How Flippers See the Market Evolving in the Next 12 Months      Average Budget for Fix and Flip Renovations   Biggest Challenges Faced with Fix and Flip Projects