Sentiment among real estate investors fell for the second straight quarter, sliding nine points to 88 on the Spring 2025 RCN Capital / CJ Patrick Investor Sentiment Index. That’s the lowest reading since the survey debuted in 2023 and a full 36‑point downslide from last autumn’s high‑water mark of 124.
The quarterly index surveys U.S. investors on four factors: (1) current and (2) six‑month outlook, (3) expected price moves, and (4) planned acquisitions, benchmarking responses to Summer 2023. Three of the four pillars turned negative this spring, with only purchase plans ticking up slightly.
Behind this latest retreat in optimism is a cocktail of economic anxiety, policy unknowns, and stubbornly high carrying costs. More than half of respondents said they now expect the U.S. economy to tip into recession within 12 months, while roughly six in 10 reported worrying that higher tariffs will inflate rehabilitation costs or snarl supply chains.
“Anticipating pricier materials and labor alongside weaker demand is clouding investors’ hopes for growth.” —CJ Patrick Company CEO Rick Sharga
In addition, nearly half of respondents said they fear large‑scale deportations could thin the pool of skilled construction labor.
Those cross‑currents are reshaping near‑term expectations. Only 31% of investors say today’s market is better than that of a year ago, down from 35% last quarter. And 34% now see conditions as worse, which is equal to sentiment a year ago.
Looking ahead six months, investors are split into thirds — one expecting improvement, one flat, one expecting a decline — yet the share forecasting deterioration has jumped 14 points since winter.
“Investor sentiment is tracking the same down‑draft we’ve seen in consumer and home‑builder surveys,” noted RCN Capital CEO Jeffrey Tesch. He pointed to economic uncertainty, still‑rising home and insurance costs, and elevated financing rates as the biggest headwinds.
Flippers keep the faith, landlords grow cautious
Fix‑and‑flip operators remain notably sunnier: 44% said they believe conditions improved over the past year, versus just 17% of rental‑property buyers. Nearly half of flippers expect the market to brighten by late summer, while only 17% of buy‑and‑hold investors share that optimism.
Still, 35% of flippers and 28% of landlords plan to dial back purchases in 2025.
Price expectations, while cooling, stay positive. A slim majority (53%) foresee further appreciation, albeit mostly under 5%. Yet, higher insurance premiums are emerging as a deal‑breaker: three‑quarters of respondents said coverage costs now factor into go/no‑go decisions, and 43% said they have already walked away from a transaction because they couldn’t secure or afford a policy.
Rick Sharga, CEO of real estate and mortgage industries market intelligence firm CJ Patrick Company, summed up the mood this way: “Anticipating pricier materials and labor alongside weaker demand is clouding investors’ hopes for growth.”
