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Market conditions viewed as improving, despite ongoing challenges with high finance costs, limited inventory, and soaring insurance costs.
To download the full version of the Winter 2025 Investor Sentiment Survey, click here.
SOUTH WINDSOR, CT – January 27, 2026 – Real estate investor sentiment held steady in the fourth quarter of 2025 according to the Winter 2025 RCN Capital/CJ Patrick Company Investor Sentiment Index (ISI)™. The index matched the previous quarter’s score of 101, the seventh score of 100 plus in the 11 quarters since the ISI was first published in 2023, indicating a generally positive outlook by investors across the country. Investor outlook for 2026 was generally optimistic, with 38% of investors expecting market conditions to improve throughout the year, while only half as many (19%) expected conditions to worsen.
According to the Winter 2025 RCN Capital Investor Sentiment Survey™, the percentage of investors who viewed today’s market as better or much better than it was a year ago held at 45% for the second consecutive month; those who viewed the market today as being the same as a year ago also stayed the same at 30%. Investors had similar expectations about where the market is headed over the next six months, with 44% expecting the market to improve, 36% expecting it to stay the same, and only 19% fearing it will decline.
The Investor Sentiment Index appears to have plateaued after rising by 14 points from the Spring to the Summer and staying essentially flat over the past two quarters. This quarter’s score of 101 was four points higher than the previous year’s Winter index score, suggesting a modest improvement in investor outlook for the coming year. Last Spring’s score of 88 was the lowest in seven quarters measured to-date, so it will be interesting to see if investor sentiment maintains its current levels during the upcoming quarter.
“Investor sentiment seems to have stabilized at a reasonably positive level, and investors seem cautiously optimistic about 2026,” said RCN Capital CEO Jeffrey Tesch. “This could be due to housing market conditions that have improved somewhat – both new and existing home sales gained momentum toward the end of 2025, price appreciation slowed down, and the inventory of homes available for sale increased. All of these trends are favorable for both fix-and-flip and rental property investors.”
Many Investors Plan to Stay on the Sidelines in 2026
Despite a generally optimistic view of the future, investors are being very circumspect in their purchase plans for 2026. Over 34% of respondents said they planned to buy no properties in the next 12 months, up from 32% in the previous survey. Meanwhile, almost 46% plan to buy between 1-5 properties, 17% between 6-10, and almost 4% will buy 11 or more properties.
For the majority of investors (54%), this is about the same number of properties they purchased in the last 12 months. Only 12% plan to buy more properties than last year, while just under 34% plan to buy fewer – both improvements from last quarter, when 43% planned to buy fewer homes and about 8% planned to buy more.
Rental property investors appear more cautious about the future than flippers: almost 45% of rental investors plan to not buy any properties in the next 12 months, compared to 26% of flippers. About 50% of rental investors and 45% of flippers plan to buy between 1-5 properties, while 27% of flippers and less than 5% of rental investors plan to buy between 6-10. This could be due to a perceived (and probably temporary) over-supply of rental units in the country, as a record number of apartments have come to market in the past 18 months.
For the largest number of respondents from each investment group, 2026 plans are similar to 2025 investing: 45% of flippers and 54% of rental investors say they’ll be buying about the same number of properties this year. But 41% of both groups say they’ll be buying fewer than a year ago.
As has been the case consistently throughout the history of the survey, flippers were considerably more optimistic than rental property investors. Almost 52% of flippers expected conditions to improve in 2026; over 35% felt they’d stay the same; and under 13% felt things would be worse. In contrast, only 26% of rental property investors expected improvements; 51% expected the status quo; and over 23% believed that conditions would worsen.
Investors Expect Home Prices to Rise, Mortgage Rates to Moderate
Over 57% of the investors surveyed expect prices to rise over the next six months, while only 16% expect to see price declines. Some of these views may be colored by regional trends, which show prices continuing to rise in the Northeast and Midwest, while flattening out in many states, and declining in parts of the South and Southwest. Investor opinions haven’t changed much since last quarter, when 62% expected to see prices continue to rise and only 13% were anticipating falling prices.
Flippers are slightly more likely than rental investors to anticipate increasing home prices, with 65% expecting prices to continue to rise and just 11% expecting price declines. Of the rental property investors, 56% anticipate price increases and over 20% expecting prices to fall.
On the other hand, just under 24% of investors expect mortgage rates to continue to rise in 2026, down slightly from last quarter’s 27%. About 44% expect rates to stay roughly where they are, in line with last quarter’s 46%. But there’s slightly more optimism about finance costs this quarter, as the number of respondents expecting rates to dip below 6% rising by two points, from 4% to 6%.
These rates play an important role in investors’ markets: about 22% of respondents to the Winter survey said rising rates had resulted in a decline for owner-occupied homes; another 22% reported an increased demand for rental properties – probably from prospective homebuyers who couldn’t afford to finance the purchase of a home. Some 31% said they’d seen both of these trends in their markets, while almost 12% said they’d seen demand for both owner-occupied homes and rental decline since rates went up.
Insurance Challenges a Major Consideration for Real Estate Investors
Insurance costs and limited availability continue to weigh heavily on real estate investors. Nearly 74% of the respondents said that insurance issues were a factor in their investment decision-making, and almost 53% said insurance-related factors had caused them to miss out on a deal. These numbers are consistent with previous surveys but may perhaps be trending slightly lower: in the prior quarter, 77% of the respondents said insurance issues factored into their decision-making, and 64% said they’d lost out on at least one opportunity.
The topic appears to be more top of mind for flippers, with almost 82% of them acknowledging it as a factor in their investment decision-making, compared to 63% of rental investors. This could be because insurance issues appear to have caused far more missed opportunities among flippers than rental investors, with 67% of the former saying they’ve missed out on a deal, compared to just 32% of the latter.
In markets hardest hit by extreme weather events over the past few years – Florida and California – the responses were a bit more extreme. In California, 100% of flippers and 67% of rental investors factor insurance into their investment decisions. In Florida, 92.5% of flippers and 82% of rental investors do likewise. Some 80% of California flippers and 77.5% of Florida flippers have missed out on an investment opportunity due to insurance costs or unavailability, while the same is true to a lesser degree among rental property investors, with 33% of California respondents and 55% of Florida investors noting this.
The Impact of Immigration and Tariff Policies May be Diminishing
The impact of Trump Administration immigration and tariff policies, while still significant, appears to be waning. Over 37% of the respondents said that immigration policies had made it harder for them to find and keep skilled workers, down from 46% in the prior quarter. About 33% said these policies had increased their labor costs, compared to 34%; and the number of investors who said their sales or rental opportunities had declined dropped from 21% to 20%. Meanwhile the number of investors who said these policies have had no impact on their business climbed from 38% to 43%.
However, responses from rental investors and flippers on this question were starkly different: over 51% of flippers said the policies had made it harder for them to find and keep skilled labor, and almost 42% said it had raised their construction costs. The numbers were much lower among rental investors, where 26% noted labor challenges and 24% noted construction price increases. Almost 61% of rental investors said the immigration policies hadn’t had much of an impact on their business, while only 27% of flippers felt the same way.
Responses regarding tariffs followed a similar pattern. About 45% of respondents said tariffs had resulted in higher prices on products and materials, down from over 56% last quarter; 34% said they’d seen a reduction in their net margins, the same number as in the last survey; just over 30% said they’d noticed a disruption in supply chains, down almost seven points from the Fall survey; and the number of investors who said they’d seen no impact on their business rose from 27% to 29%.
Both flippers (51%) and rental investors (43%) said that tariffs had increased their construction costs. More flippers (43%) than rental investors (27%) said the impact of tariffs had reduced their profit margins, but more rental investors (32%) than flippers (25%) noted supply chain disruptions. And rental property investors were more likely than flippers to say that tariffs hadn’t had an impact on their businesses 36% vs. 22%.
High Cost of Financing, Rising Home Prices, and Limited Inventory Still Major Challenges
The biggest challenges cited by investors in the Winter survey were similar to those noted in prior reports. The high cost of financing was cited most often, by over 58% of the investors, followed by rising home prices (37%), competition from larger investors (29%), lack of inventory (29%), and rising material and product costs (27%). Responses to this quarter’s survey do suggest that financing costs may be improving, and that investors expect the improvement to continue. While the high cost of financing was cited most often as a major challenge investors expect to have six months from now, the percent of times it was mentioned dipped to 51% - down seven points from current market conditions and almost 10 points from the prior quarter.
“Market dynamics like weakening demand from homebuyers, rising costs, higher finance charges, and limited inventory have made things difficult for real estate investors over the past few years,” said Rick Sharga, CJ Patrick Company CEO. “But fewer investors are finding it necessary to reduce sales or rental prices and many are reporting improvements in their local markets. Perhaps investor behavior is showing us some early indications of a housing market finally in recovery.”
To download the full version of the Winter 2025 Investor Sentiment Survey, click here or on the image below:
About RCN Capital
RCN Capital is a South Windsor, CT-based national, direct, private lender. Established in 2010, RCN provides investment loans for the purchase or refinance of non-owner-occupied residential properties. The company specializes in new construction financing, short-term fix & flip and bridge financing, and long-term rental financing for real estate investors. For more information on RCN Capital and RCN’s loan programs, visit www.RCNCapital.com.
About CJ Patrick Company
Founded in 2019, CJ Patrick Company is a Market Intelligence and Business Advisory firm working with companies in the real estate and mortgage industries. Visit www.cjpatrick.com for more information.
About the RCN Capital/CJ Patrick Investor Sentiment Index™ (ISI)
The RCN Capital/CJ Patrick Investor Sentiment Index™ (ISI) was designed to track the pulse of real estate investors across the country and gauge market outlook. The ISI is based on a quarterly survey of residential real estate investors and focuses on their responses to four specific questions:
- Current Market Outlook - How does the environment for residential real estate investing compare to one year ago?
- Future Market Outlook - What’s your outlook for residential real estate investing over the next 6 months compared to today?
- Expected Home Price Increases - What do you expect home prices to do over the next 6 months?
- Number of Properties Compared to Past 12 Months - How does the number of properties you plan to invest in over the next 12 months compare to the number of properties you’ve invested in over the past 12 months?
More detailed methodology available upon request.
Contact:
Erica LaCentra
RCN Capital
Rick Sharga
CJ Patrick Company