RCN Capital Reports Real Estate Investor Sentiment Falls

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RCN Capital, South Windsor, Conn., released the spring 2025 RCN Capital/CJ Patrick Co. Investor Sentiment Index, finding that the quarterly score fell to 88.

That’s the lowest level recorded since the inception of the index, in fall 2023.

It’s down significantly from the all-time high of 124 in the fall 2024 report, and down from 97 in the winter edition.  

The percentage of investors who view today’s market as better or much better than it was a year ago fell to 31%, down from 35% in the previous quarter. The percentage who felt market conditions have worsened rose from 25% to 34%.

However, investors were split almost perfectly over where the market is going next–34% expect it to improve, 33% expect it to stay the same and 33% anticipate a decline.

“Investor sentiment is trending along the same lines as homebuilder sentiment and consumer sentiment, which recently recorded its second-lowest score in over 50 years,” said RCN Capital CEO Jeffrey Tesch. “Our survey results suggest that enthusiasm among both rental property and fix-and-flip investors is being challenged by economic uncertainty, rising home prices and insurance prices, and high finance costs. Hopefully market conditions will become more favorable as we move into the important spring and summer months.”

Fix-and-flip investors reported a more positive sentiment than rental property investors. Forty-four percent of flippers believe that market conditions have improved over the past year, compared with 17% of rental property investors. And, similarly, only 17% of rental property investors believe conditions will improve over the next six months, but 48% of flippers do.

About 47% of all investors plan to buy the same number of properties in 2025 as they did last year.

More than half–56% of investors–anticipate the U.S. economy will enter a recession in the next 12 months, with concerns about tariffs, large-scale deportations and other economic and political factors playing a role.

The high cost of financing was listed by a majority of investors as their biggest challenge, at 55%, with rising home prices, competition from larger investors, lack of inventory and the high cost and/or limited availability of insurance also listed.