Real estate investor sentiment ended 2025 on firmer footing, with confidence holding steady and outlooks turning cautiously optimistic heading into 2026, according to RCN Capital’s Winter Investor Sentiment Survey.
RCN’s Investor Sentiment Index (ISI) remained unchanged from the prior quarter at 101, marking the strongest fourth-quarter reading in the survey’s three-year history, and signaling stabilization above the neutral benchmark.
While sentiment has improved modestly from a year earlier, the survey shows that investors are still navigating a mixed environment. Nearly 38% of respondents expect market conditions to improve in 2026, double the share anticipating deterioration, while 44% see improvement over the next six months. Fix-and-flip investors remain notably more bullish than rental property investors, with more than half of flippers forecasting better conditions next year compared with just 26% of rental investors.
“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.”
Improving fundamentals appear to be supporting sentiment. Respondents pointed to rising home sales, moderating price appreciation, easing mortgage rates, and growing inventory as factors improving affordability and deal flow. Even so, challenges persist. High financing costs were cited as the top concern by more than 53% of investors, followed by rising home prices, competition from institutional investors, limited inventory, and higher material costs.
Insurance costs and availability continue to weigh heavily on decision-making, with nearly 74% of respondents said insurance considerations now factor into whether they pursue a deal, and more than half reported missing at least one opportunity due to insurance issues. The concern is especially pronounced in California, where both flippers and rental investors increasingly expect insurance to become an even greater challenge in the coming months.
Despite optimism about prices — 57% expect home values to rise over the next six months — investors remain cautious in their acquisition plans. About 34% plan to buy no properties in the next year, while roughly 46% expect to purchase between one and five. Most respondents anticipate buying about the same number of properties in 2026 as they did in 2025, reflecting a measured approach rather than aggressive expansion.
Overall, the survey suggests investors are entering 2026 with tempered confidence, balancing improving market conditions against persistent cost and risk pressures as they seek selective opportunities rather than broad-based growth.
“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.”
