In recent years, the US home flipping industry has been negatively impacted by the increase in interest rates engineered by the US Federal Reserve (Fed). The number of Americans acting as investors in the housing market has dropped by 38.85% between 2021 and 2023's fourth quarter. Home flipping, which involves buying and renovating a single-family home with the intent to sell for a profit, has declined since the peak during the Covid-19 pandemic. The share of homes purchased by investors fell 11% on a year-over-year basis in 2023. Despite the decline, housing investors spent $32.3 billion on homes in the United States in 2023 [226b1e37].
The current housing market is characterized by limited inventory and lukewarm demand, resulting in reduced profits for flippers. The decline in homebuyer demand has made it easier for investors to find single-family homes, but reduced inventory has outweighed this advantage. Construction companies have also experienced a decline in business activity due to the cooling home investment. Some flippers have diversified their activities, such as making property-secured loans or wholesaling home purchase contracts. Overall, the home flipping industry has been significantly impacted by the increase in interest rates and the resulting slowdown in the housing market [226b1e37].
Meanwhile, in Poland, the Left Alliance is seeking to introduce legislation to limit real estate flipping. Flipping, a form of real estate business where properties are bought cheaply, renovated, and resold for a profit, has been accused of contributing to gentrification and rising house prices. Magdalena Biejat, deputy chair of the Left Alliance, is leading the charge against real estate flipping and proposes implementing an additional tax for those who resell a property in a short period of time. However, the effectiveness of such measures has been limited in other countries [10702a84].