Homes renovated by investors, AKA “house flippers,” accounted for 9% of all home sales in the first three months of 2023, according to new data from Attom. That represents the second-highest share of sales for flipped homes in history, second only to the first quarter of 2022.

This increased flipping activity comes despite the fact that gross profits are down.

“In the first quarter, profit margins showed a slight upward turn after an extended slip, while interest in flipped homes continued to rise among buyers,” said Attom CEO Rob Barber. “However, investors shouldn’t assume they’re out of the woods yet.”

For the typical U.S. flipped home during the first quarter, gross profits only amounted to $56,000, down 20% from the fourth quarter of 2022. That’s not including any renovation costs. Furthermore, flippers sold at a loss in four cities: Austin, Texas (-10.2%), Phoenix (-2.4%), Ogden, Utah (-0.5%) and Las Vegas (-0.3)%.

Despite Phoenix flippers selling at a loss so far in 2023, the city has one of the largest flipping rates of any metro area with a population over 1 million at 13.9% of all homes sold in the first quarter. Phoenix also has one of the lowest raw profit margins — that is, overall profit including renovation costs, labor and all other associated expenses. With all these factors taken into account, the average Phoenix flipper lost nearly $10,000 on each flip during the first quarter of last year.