RealtyTrac released its U.S. Home Flipping Report for the first quarter of 2014, reporting that 3.7 percent of all U.S. single-family home sales were flips, which the company defines as homes purchased and sold again within six months. Nationally, home flipping is down, dropping 4.1 percent from the fourth quarter of 2013. Yearly, home flipping declined as well, dropping 6.5 percent. The company believes the drop is from investors recalibrating their strategy to account for slower home price appreciation.
On average, flips in the first quarter took 101 days to complete, up from 92 days in the previous quarter. The average sales price of a single-family home was approximately $55,000 higher than the purchasing price. The gain in sales price reflects an unadjusted ROI of 30 percent. Additionally, 82 percent of all properties flipped in the first quarter were sold to owner-occupants, while 18 percent of homes were sold to buyers with a different mailing address than the property purchased. 43 percent of properties were all-cash sales.
The Board of Governors of the Federal Reserve System issued their Federal Open Market Committee statement, noting it will further taper its purchases of mortgage backed securities by $5 billion for a total of $20 billion per month. Additionally, longer-term Treasury securities will be scaled back to $25 billion per month, rather than the previous figure of $30 billion. The Fed commented that growth in economic activity has picked up recently despite a sluggish first quarter, due in part to adverse weather conditions.