Higher interest rates and a shrinking labor market are impacting the fix-and-flip housing market. The market contracted in Q2 compared to previous quarters, with reduced sentiment and increased days-on-market for flipped homes. Flippers are facing labor shortages, rising costs, and declining sales in regions like Florida, Northern California, and the Southwest.

Flippers are experiencing challenges with housing velocity and turnover timelines, leading to capital tied up in properties. Labor and material costs hit record highs, but ROI percentages remain steady. Professional flippers are becoming more conservative and selective in their investments, adjusting purchase prices to maintain ROI metrics.

Some markets are seeing declining home prices, with national prices just 1.7% higher than a year ago and a slow monthly gain of 0.1%. Flippers in regions like Florida and Northern California are facing increased competition from homebuilders and rising costs. Lenders like Kiavi are tightening credit standards in response to market volatility.

Read more at CNBC: Fix-and-flip real estate investors pull back