Investor confidence in the single-family housing market has significantly declined due to a confluence of factors, including rising interest rates, increased insurance and home costs, and geopolitical tensions surrounding the conflict in Iran. According to the latest RCN Capital/CJ Patrick Company Investor Sentiment Index, investor sentiment dropped to an all-time low at the end of June, marking the second consecutive quarter of decline.
The survey, which includes responses from over 300 investors involved in fix-and-flip and rental markets, revealed that only 26% felt the market conditions had improved compared to a year ago—a notable decrease from 35% in the previous quarter. Conversely, 45% reported that market conditions had worsened, the highest percentage recorded since the survey began in 2023.
Jeffrey Tesch, CEO of RCN Capital, attributed this pessimism to rising finance costs, limited property inventory, escalating renovation expenses, and downward pressure on rental rates, exacerbated by the ongoing conflict in Iran. While large institutional investors face new restrictions under the 21st Century ROAD to Housing Act, most respondents in the survey were small to mid-sized investors, who typically rely on a mix of bridge loans and conventional financing. Approximately 28% of those surveyed reported recent cash purchases.
Mortgage rates, which had recently reached a low in February, have surged again coinciding with the start of the war in Iran, now reaching their highest levels in over a year. As a consequence, 54% of respondents identified high financing costs as a primary concern, and three-quarters do not expect any relief. Additionally, investor activity has declined, with a reported 23% drop in purchases during the first quarter of 2026 compared to prior periods.
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