The quarterly RCN Capital/CJ Patrick Company Investor Sentiment Index indicates a sharp decline in confidence among real estate investors, with only 26% believing market conditions have improved over the past year, down from 35% in the previous quarter.
The survey, which includes over 300 investors primarily from small to mid-sized firms, reveals that 45% feel the market has worsened, the highest percentage recorded. Factors contributing to this pessimism include rising finance costs, limited inventory, and escalating home prices, exacerbated by the ongoing conflict in Iran.
Mortgage rates, which had recently dipped, have surged to their highest levels in over a year, leading more than half of the respondents to identify financing costs as a major issue. Consequently, real estate investors purchased 23% fewer homes in the first quarter of 2026 compared to previous quarters, with 32% of respondents indicating they do not plan to buy any properties this year.
Despite the negative outlook, over 60% expect home prices to rise in the next six months, which could increase acquisition costs for new investments while potentially enhancing the value of existing properties