Real estate investor confidence fell to its lowest level on record this summer, according to the Summer 2026 RCN Capital/CJ Patrick Company Investor Sentiment Index, published Aug. 5. The index dropped to 84, the lowest score in the survey’s 12-quarter history and the second consecutive quarter below 90.
The reading is down three points from Spring 2026’s score of 87 and 18 points from a year ago, when the index stood at 102. Only 26% of investors surveyed said current market conditions are better than a year ago, the lowest share on record, while 45% said conditions have worsened, the highest percentage the survey has ever recorded. The remaining 29% saw conditions as unchanged.
“Investors…clearly feel that market conditions today have become more and more difficult,” RCN Capital CEO Jeffrey Tesch said in the release. CJ Patrick Company CEO Rick Sharga, whose firm co-produces the index, said real estate investors purchased 23% fewer homes in the first quarter of 2026 than in the prior quarter, a pullback that lines up with the survey’s souring mood.
Despite the gloom about present-day conditions, investors were somewhat more optimistic about the near-term outlook than in the prior survey. Thirty-four percent expect conditions to improve over the next six months, up from 32% previously, while 27% expect further deterioration, down from 32%. Thirty-nine percent expect conditions to hold roughly steady. More than 60% of respondents still expect home prices to rise over the next six months, versus just 13% who expect declines β a sign investors see persistent price pressure even as they grow more cautious about deal activity.
That caution shows up clearly in buying plans. Thirty-two percent of investors said they plan to make zero property purchases in 2026, though that is down slightly from 34% in the prior survey. Fifty-five percent plan to buy between one and five properties, but 36% overall expect to buy fewer properties than they did last year, versus just 9% who intend to buy more.
Investors cited financing costs as their top challenge, named by 55% of respondents, followed by rising home prices (48%), material and product cost increases (34%) and limited inventory (29%). Insurance emerged as a significant friction point: 71% said insurance factors into their investment decisions, and half of respondents said they had missed out on a deal specifically because of insurance-related issues. Seventy percent of investors said tariffs are negatively affecting their operations, and 48% pointed to tariffs as a driver of higher material and product costs.
Financing patterns remained largely stable: 72% of investors said they use financed purchases versus cash, and 73% expect interest rates to stay flat or rise further through the end of the year. By investor type, fix-and-flip investors were somewhat more optimistic than average, with 44% expecting improved conditions against 27% expecting deterioration, while rental-property investors leaned toward stability, with 46% expecting conditions to hold steady, 26% expecting improvement and 28% expecting further declines.
What it means
The record-low sentiment reading captures a market where investors are simultaneously bearish on near-term conditions and bullish on long-run prices β a combination that helps explain why activity has slowed even as many investors remain reluctant to call a bottom. High financing costs remain the dominant complaint, consistent with mortgage rates that recently climbed above 6.6%, and the survey’s tariff and insurance findings point to cost pressures that are increasingly squeezing investor margins independent of interest rates.
The gap between rising price expectations and falling purchase intentions suggests many investors are choosing to wait rather than compete for deals in a market they still expect to appreciate, a dynamic that could keep transaction volume subdued even if rates ease later in the year. RealtyWire analysis: with 72% of investors relying on financing, further rate increases could accelerate the pullback in purchase activity documented by Sharga’s Q1 data, even as elevated price expectations keep many would-be sellers from discounting to move inventory.
What to watch: whether the modest uptick in six-month optimism (34%, up from 32%) persists into the fall survey, and whether insurance costs β now a factor in a majority of investment decisions β continue rising as a share of investors’ stated challenges.
