Category: Market Notes

In the first quarter of 2026, the average flipped home in Dallas–Fort Worth was bought for $418,856 and sold for $437,003. That is a gross spread of $18,147 and a 4.3 percent gross return on investment.

Gross. Before rehab. Before points and interest. Before taxes, insurance, and utilities during the hold. Before commission, closing costs, and whatever the buyer asks for after inspection.

The average Dallas–Fort Worth flip last quarter did not have room in it for a rehab budget. That is my home market.

Nationally the picture looks fine, which is the trap

The national gross margin was 25.4 percent in Q1, up from 24.7 percent the prior quarter — which had been the lowest reading since mid-2008. Gross profit nationally averaged $66,000, up from $64,300.

So the headline is that flipping returns ticked up after seven straight quarterly declines. True, and close to meaningless if you operate in one market.

Boston averaged a 28.4 percent gross ROI on $184,000 of average gross profit. Dallas–Fort Worth averaged 4.3 percent on $18,147. Those two numbers are in the same national average. The average is not a market. You cannot buy the average.

What I would do with this

Stop quoting national flip statistics in your own underwriting. Pull your metro. Then pull your submarket and your price band inside that metro, because the dispersion inside Dallas is nearly as wide as the dispersion between Dallas and Boston.

And run the exit before you run the rehab. Gross margin is not profit. If the spread between purchase and realistic resale does not cover the work plus the cost of money plus the cost of selling, there is no deal there — no matter how good the buy looks.

Sources: ATTOM Q1 2026 US Home Flipping Report and the ATTOM–Backflip Q1 2026 market-level analysis. Retrieved August 3, 2026. Nothing here is investment, legal, or tax advice.

The 30-year fixed mortgage averaged 6.66 percent for the week ending July 30, up from 6.58 percent the week before. That is the highest level in roughly a year.

The 15-year fixed averaged 6.04 percent, up from 5.96 percent.

Here is the part worth sitting with: a year ago the 30-year averaged 6.72 percent. So after twelve months of headlines about the Fed, the direction of rates, and what was coming next — we are essentially back where we started.

Why this matters to an investor and not just a homebuyer

You are probably not financing your flip with a 30-year fixed. But your buyer is.

The 30-year rate sets what your exit buyer can afford, which sets what your finished house is actually worth, which sets your after-repair value. Every dollar of monthly payment your buyer cannot carry comes out of your ARV. That is the transmission mechanism, and it is why I read this number every week even though I do not originate a single 30-year loan.

The 10-year Treasury sat at 4.70 percent on August 3, down about five basis points on the session. Mortgage rates track the 10-year more than they track the Fed, which is a distinction most commentary skips.

The move

Pull the comps your exit buyer would actually qualify for at 6.66 percent, not at the rate you had in your head from last spring. If the spread between those two numbers eats your margin, you found your answer before you bought the house instead of after.

Sources: Freddie Mac Primary Mortgage Market Survey, week ending July 30, 2026; US 10-year Treasury yield, August 3, 2026. Retrieved August 3, 2026. Nothing here is investment, legal, or tax advice.

The Federal Reserve held rates steady on July 29 for the fifth consecutive meeting. That is the headline everyone ran. It is the least interesting thing that happened.

The vote was 9–3. All three dissenters — Beth Hammack, Neel Kashkari, and Lorie Logan — wanted to raise the target range by a quarter point. Not hold. Not cut. Raise.

If you have been waiting for cheaper money before you buy, read that sentence again.

The dots moved the wrong way

The target range is still 3.50–3.75 percent. But most officials now expect the benchmark to sit between 3.6 and 4.1 percent at the end of 2026 — up from 3.25 to 3.75 percent previously.

The committee also described economic activity as expanding at a solid pace with inflation still elevated against the 2 percent goal. That is not the setup for a cutting cycle.

What it means if you buy houses

I have watched a lot of investors spend the last two years underwriting to a rate cut that has not arrived. The deal does not work today, but it will refinance into something better in six months. That is not underwriting. That is hoping.

Three voting members of the Federal Open Market Committee just said out loud that they think rates should go up. Whether they are right is a separate question. The point is that the range of outcomes is wider than most people are pricing, and it is no longer one-directional.

Underwrite the deal at the rate you can get today. If a cut shows up later, that is upside — not the plan.

Sources: Federal Reserve FOMC statement and materials, July 29, 2026. Retrieved August 3, 2026. Nothing here is investment, legal, or tax advice.