The Iran War and deteriorating housing market conditions are contributing to a steep dive in sentiment among real estate investors this summer, with almost one-third suspending purchases in 2026, according to a new report.
Only 26% of investors believe current conditions show improvement on a year-over-year basis, which is the lowest share on record, the quarterly report from RCN Capital and CJ Patrick Co. said. Similarly, 45% of investors surveyed said business opportunity has declined over the same 12-month time period, a new high.
The latest numbers point to souring investor enthusiasm throughout 2026, as the "better" share decreased from 35%
"Investors, both fix-and-flip and rental property investors, clearly feel that market conditions today have become more and more difficult," said RCN Capital CEO Jeffrey Tesch in a press release.
"In addition to the ongoing conflict in Iran, rising finance costs, limited inventory, escalating home and renovation costs and downward pressure on rental rates are all contributing factors for their increased pessimism."
The ongoing Iran conflict led 24% to claim it had a detrimental effect on them in driving up costs or squeezing profits. A 40% share of respondents claimed the war was having a negative impact on the investor market.
Current developments drove the RCN/CJ Patrick investor sentiment index to fall for a second straight quarter, leading it to land at its lowest reading of 84 since the survey was introduced in 2023. The number was three points lower than 87 reported in the spring, and compared to summer 2025, sentiment fell from a score of 102.
After the index settled at 101 to close 2025, economic concerns at the start of this year led it to plunge, and subdued sentiment is reflected in the number of purchases investors are making, according to CJ Patrick Co. CEO Rick Sharga.
"Real estate investors purchased 23% fewer homes in the first quarter of 2026 than they did in the previous quarter and in the first quarter of 2025, he said.
"The survey also shows that 32% of the respondents don't plan to buy any properties at all this year, and only 9% plan to buy more than they did a year ago," Sharga added.
A 55% majority of investors, though, said the quantity they intended to buy would likely be the same as a year ago. Nine percent expect to buy more.
Financing costs set investors back
Among the biggest challenges currently facing survey respondents, accelerating home finance costs were cited by a 55% majority. Meanwhile, 48% pointed to the
As fewer than one-third of investors buy properties in cash, both of these challenges impact their business prospects, Sharga said.
Approximately 34% said material and product supply costs made business difficult, while 31% noted competition from institutional investors as a challenge.
In a reversal of downward trends reported over the prior three quarters, 60% of investors now anticipate home prices will rise, further squeezing purchase opportunity. The share increased from the prior survey, when it clocked in at 52%.
At the same time,
Optimism nudged higher among respondents regarding their six-month outlook. A little more than one-third, or 34%, expect the business situation to improve by the end of 2026. Fix-and-flip investors were more likely than rental landlords to express such sentiment, the survey said.
