How Economic Conditions Affect Real Estate Fraud Numbers

Real estate fraud is always present in the market, but it does not move at a fixed pace. The FBI’s Internet Crime Complaint Center data from 2020 through 2025 makes that clear: reported losses under the Real Estate crime type swung from roughly $397 million in 2022 down to $145 million in 2023, then back up to $275 million by 2025. Compared to 2024, that is a 59% year-over-year increase in a single reporting period.

Those swings are not arbitrary: they track, with notable consistency, periods of housing market stress, rapid policy shifts, and structural changes in how real estate transactions are conducted.

Understanding how real estate fraud patterns shift is important for residential real estate companies and professionals to know what they are dealing with year over year, and it is part of running a portfolio that doesn’t absorb costs it didn’t anticipate.

How real estate fraud losses have moved from 2022 to 2025

The FBI IC3 real estate fraud figures for 2022 through 2025, drawn from the IC3's annual crime reports, show a pattern that does not follow a straight upward line:

• 2022: 11,727 complaints, $396.9 million in reported losses, the highest loss total in the series
• 2023: 9,521 complaints, $145.2 million in losses, a steep drop despite record renter cost burdens
• 2024: 9,359 complaints, $173.6 million in losses, complaints slightly lower but dollar losses rising again
• 2025: 12,368 complaints, $275.1 million in losses, the highest complaint volume in the series and a 59% increase in losses year over year

If sustained financial hardship were the main driver, losses should have kept climbing through 2023 and 2024, when renter cost burdens were at record highs and eviction filings in many markets had returned to pre-pandemic levels. They didn't. The pattern that fits the data better is this: real estate fraud losses spike during years of rapid market transition, not simply during years when conditions are hard.

2022 was a transition year. The Federal Reserve raised rates from near zero to 4.33% by year-end — the fastest hiking cycle in decades. Home sales fell from 6.12 million in 2021 to 5.03 million. Buyers, renters, and property professionals were adjusting to a market that changed faster than most processes could keep up with. 2025 has a similar shape: annual home sales are forecast at 4.0 to 4.3 million, close to 2024's 4.06 million, the lowest since 1995. Rates remain elevated at around 4.33% and financial pressure on renters and landlords continues.

One important thing to keep in mind is that IC3 figures only capture fraud that gets reported to the FBI. A significant share of real estate fraud cases never reach law enforcement, so these numbers show a directional trend, not a complete count of what is actually happening. Property Shield's own data gives a sense of the gap: in 2025 alone, Property Shield removed more than 500,000 fraudulent listings across multiple platforms on behalf of clients. That volume does not appear in any government report. It reflects what continuous, automated monitoring catches that complaint-based data never will.

Why tight inventory makes fake listings more effective

One factor that does not show up directly in the IC3 data, but helps explain why listing-level fraud stayed active even as BEC losses fluctuated, is inventory. When the Federal Reserve began raising rates in 2022, a large share of existing homeowners stopped selling. At the peak of the lock-in effect in Q1 2022, 65.1% of mortgage holders had rates below 4% and 24.6% had rates below 3%, according to Redfin's analysis of FHFA mortgage data. Moving into a 6% or 7% rate environment meant a significantly higher monthly payment on a comparable home, so many owners stayed put. The FHFA estimates that the lock-in effect prevented roughly 1.72 million home sales between Q2 2022 and Q2 2024.

The result was a sustained inventory drought. Active listings on the U.S. residential market fell to under 1 million for much of 2021 through 2023, according to Realtor.com and FRED data. By July 2025, inventory had recovered to just over 1 million nationally, but still sat 13.4% below pre-pandemic levels.

Low supply, high demand, and time pressure are exactly the conditions that make fake listings easier to pass off. When there are few legitimate options available, renters and buyers move faster and are less likely to pause and verify. NBC News, citing FBI sources, reported that rental scam losses rose 64% from 2020 to 2021 as the market tightened, with the FBI explicitly framing high-demand, low-supply environments as what makes fraudulent listings more effective. Zillow's consumer fraud guidance makes the same point: fake listings are harder to spot when inventory is scarce because urgency overrides caution.

What happens to fraud when the market shifts fast

A 2021 analysis from the University of Cambridge, reviewing fraud patterns across economic crises, points to three conditions that tend to show up together when fraud activity rises: fast-moving policy or process changes that leave gaps in oversight, uncertainty that makes people more likely to fall for schemes that promise a quick fix, and institutions too stretched to maintain normal controls.

All three were present in 2022. Property closings had shifted to remote, email-based processes during the pandemic and stayed that way. That created an opening for business email compromise (BEC): fraud where scammers intercept or impersonate closing communications to redirect wire transfers to accounts they control. The IC3's 2024 report connects the 2022 loss spike directly to this type of fraud in real estate transactions. Because the transactions themselves were high-value, a single successful interception could mean hundreds of thousands of dollars in losses.

Financial stress made the problem worse. FSU criminology research on economic crises finds that people under financial pressure are more likely to take shortcuts or act quickly without verifying details, which is exactly what fraud schemes are designed to exploit. By 2023, nearly half of U.S. renter households were spending more than 30% of their income on housing, according to Harvard's Joint Center for Housing Studies. That kind of sustained pressure on renters and landlords alike creates conditions where fraud is easier to pull off.

The vacancy factor: more listings open means more exposure

National rental vacancy rates rose from roughly 4.5% in 2021 to around 7% or above by 2024 and into early 2025, driven mainly by a wave of new multifamily buildings entering a market where demand had softened. For SFR operators, vacancy stayed tighter nationally, though some high-construction markets saw modest increases.

More vacancies mean more active listings, on more platforms, for longer. That matters for fraud because rental scams and fake listings work by copying real listings from legitimate operators and reposting them elsewhere. A unit that sits listed for six weeks across four platforms gives fraudsters a longer window to copy it than one that leases in ten days. The more listings you have active at any given time, the more copies can circulate without your knowledge.

Why the 2023 loss drop does not mean fraud got better

In 2023, reported real estate fraud losses dropped from $396.9 million to $145.2 million — a 63% decline. But complaints only fell 19%, from 11,727 to 9,521. That gap is significant: it means the number of fraud incidents did not fall nearly as much as the dollar losses did.

The IC3's 2024 report explains this through the FBI's Recovery Asset Team (RAT), which works to freeze wire transfer funds before they move beyond reach. The RAT was significantly more active in 2023 and 2024, freezing substantial sums in BEC and real estate closing cases. The lower 2023 loss figure largely reflects better fund recovery after fraud, not a reduction in fraud attempts. The frequency of fraud stayed roughly constant. What changed was how much money was recovered after the fact.

Why fraud is harder to catch when operations are already stretched

The 2022 and 2025 spikes share something in common: both happened during periods when leasing teams and property managers were already dealing with significant pressure from outside conditions. Rate increases, rising vacancy, affordability shifts, and changing tenant demand all hit at once. Those are exactly the periods when adding fraud monitoring to the list is hardest.

This is one of the more straightforward answers to why real estate fraud is so hard to detect at scale. It is not mainly a technology gap or a knowledge gap. It is a staffing and attention gap that grows larger precisely when the market is most disruptive. A team managing high vacancy, processing more applications from financially stretched renters, and adjusting to a market that looks different than it did a year ago does not have spare capacity to manually track fraud across multiple listing platforms.

What the 2025 environment signals for fraud exposure

2025 shares the structural features that characterized the two highest-loss years in the IC3 series. Rates remain elevated at around 4.33%. Annual home sales are near their lowest level since 1995. Multifamily vacancy is at its highest since before the 2022 rate hike cycle. Renter cost burdens remain at record levels, per Harvard JCHS data, even as rent growth has moderated. And the IC3 data shows both complaint volume and losses climbing sharply.

There is no published study that directly proves economic conditions cause real estate fraud losses to rise in a proportional way. The IC3 attributes the 2025 increase primarily to more sophisticated BEC schemes and AI-enabled social engineering, not to market conditions alone. But across six years of data, the years with the highest losses are consistently years when the market shifted fast, transaction processes were under strain, and financial pressure on renters and operators was elevated. The pattern suggests fraud risk moves with market conditions rather than independently of them.

Still, fraud detection shouldn’t be something you scale up only when conditions feel difficult. The data shows that exposure gaps tend to open during transition periods, when teams are already managing other pressures. Continuous monitoring is what reduces your portfolio’s overall risk.

Understanding the types of fraud that become more active during these periods is a useful starting point. Property Shield's fraud detection platform gives operators continuous visibility across the platforms where fraud activity concentrates, regardless of what the broader market is doing. Request a demo to see what is currently active against your portfolio.