Houses line a street in a neighborhood on May 23, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
A version of this article first appeared in the CNBC Property Play newsletter with Diana Orrick. Property Play covers new and evolving opportunities for real estate investors, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large publicly traded companies. Sign up to receive future editions directly to your inbox.
Investors in the single-family home market are increasingly concerned about rising interest rates, insurance premiums and home prices, and the ongoing war with Iran. As a result, they have less confidence in their businesses than they have in at least the last three years.
According to the quarterly RCN Capital/CJ Patrick Company Investor Sentiment Index (ISI), investor sentiment at the end of June was at a record low for the second consecutive quarter. The index surveys more than 300 investors in the fix-and-flip and rental businesses.
Just 26% of respondents say market conditions are better than a year ago, the lowest percentage since the survey began in 2023 and down from 35% in the first quarter. 45% said the market has worsened, the highest in the survey’s history.
“The ongoing conflict in Iran, along with rising financing costs, limited inventory, rising housing and renovation costs, and downward pressure on rents are contributing to the pessimism,” Jeffrey Tesch, CEO of RCN Capital, a private lender to real estate investors, said in a release.
The majority of investors surveyed in this report were small and medium-sized enterprises. This is in contrast to large institutional investors who are subject to the recently enacted 21st Century ROAD to Housing Act, which essentially prohibits investors who own at least 350 single-family homes from acquiring additional single-family homes. Small and medium-sized investors tend to take advantage of bridge loans, special investor loans for rental properties, and conventional loans, typically with fixed interest rates of 30 years. Of those surveyed, 28% said they paid cash for their most recent purchase.
Mortgage rates hit a recent low at the end of February, but rose sharply once the war with Iran began. It is currently at its highest level in more than a year.
More than half of survey respondents said high financing costs were “one of the biggest issues in today’s market,” according to the report. Of these, three-quarters don’t expect interest rate easing anytime soon, and some expect rates to rise.
All of these are influencing investor buying activity.
“Real estate investors purchased 23% fewer homes in the first quarter of 2026 compared to the previous quarter and the first quarter of 2025,” said Rick Charga, CEO of CJ Patrick Company. “The survey also found that 32% of respondents do not plan to purchase any real estate this year, and only 9% plan to purchase more than a year ago.”
More than 60% of respondents expect house prices to rise in the next six months, up from just under 52% in the previous survey. Rising prices can increase the potential value of properties already owned while increasing acquisition costs for investors.
