Real estate investor sentiment declined during the first quarter to the lowest recorded score in 11-quarter history of the RCN Capital/CJ Patrick Company Investor Sentiment Index.
The 14-point drop to an index score of 87 was also the first time that all four elements analyzed in the index – current market conditions, outlook for future market conditions, home price trends, and plans for property purchases – declined quarter-over-quarter.
The percentage of investors who viewed today’s market as better or much better than it was a year ago fell to 36% from 45% in the previous quarterly survey. Those who viewed the market today as being worse rose from 25% to 36%. Only 32% of investors expected market conditions to improve, down from 44% in the prior quarter, while the number expecting conditions to worsen jumped from 19% to 32%.
Nearly 75% of the respondents said that insurance issues were a factor in their investment decision-making, and over 53% said insurance-related factors had caused them to miss out on a deal. However, the proposed ban on home purchases by large institutional investors included in the Senate’s 21st Century Road to Housing bill was not seen as a major concern for survey respondents – more than 46% of the respondents identified as smaller investors and did not believe the bill will impact them one way or the other.
“Investor sentiment was clearly affected by the war in Iran,” said RCN Capital CEO Jeffrey Tesch. “Almost 60% of the investors surveyed believed that the war would have a negative impact on the housing market, and on their business, and this reversed the positive outlook investors had expressed about 2026 in last quarter’s sentiment index.”
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