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House flipping sees resurgance

Posted by The Aramco Group on Fri, Oct 28, 2016 @ 14:10 PM

The volume of home flipping is at a six year high, indicating investors have returned to the housing market at a rate not seen since before the Great Recession. This resurgence is being hailed by city officials who claim the practice is helping to alleviate the current housing shortage and bring upgraded homes to the market.

Home flipping, which is the selling of a house less than 12 months after buying it, is a way by investors to turn a profit while also boosting home values within the surrounding neighborhood.

"This flipping activity could be seen as a social good if it's bringing houses up to standards and putting them back on the market," according to Steven Swidler, a professor at Auburn University who has studied home flipping. However, he warns that flipping could be dangerous for home prices. "It could be putting it beyond the price points for affordable housing for some people."

Meanwhile, conforming no-point 30-year fixed rates are averaging 3.375 percent while the 15-year rate is near 2.75 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.