REAL ESTATE INVESTOR SENTIMENT REBOUNDS FROM RECENT LOWS ACCORDING TO SUMMER 2025 RCN CAPITAL INVESTOR SENTIMENT INDEX™

Changing market conditions – increased inventory and slower home price growth – contribute to improving investor views on current and future housing market opportunities.

SOUTH WINDSOR, Conn., Aug. 14, 2025 /PRNewswire/ -- Real estate investor sentiment rebounded after declining sharply for two consecutive quarters, according to the Summer 2025 RCN Capital/CJ Patrick Company Investor Sentiment Index™. After hitting a two-year low of 88 in the Spring, the index rose by 16% to a score of 102, buoyed by dramatic improvements in positive scores for both current market conditions and anticipated trends over the next six months. Even with this increase, the index remained lower than it was a year ago, when the score was 116.

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According to the Summer 2025 RCN Capital/CJ Patrick Company Investor Sentiment Index™, the percentage of investors who viewed today's market as better or much better than it was a year ago increased from 31% in the previous quarter to 48%; those who viewed the market today as being the same as a year ago dropped from 34% to 26%; while the percentage of those who felt market conditions had worsened fell from 34% to 25%. Investors were slightly more optimistic about where the market is headed over the next six months, with 49% expecting the market to improve, 30% expected it to stay the same, and only 20% expecting it to decline.

The RCN Capital/CJ Patrick Company Investor Sentiment Index™ (ISI) tracks the pulse of real estate investors across the country and gauges their market outlook. The Index uses Summer 2023 (the initial survey) as its basis, and analyzes responses to four key questions:

• Current Market Outlook - How does the environment for residential real estate investing compare to one year ago?
  
  
• Future Market Outlook - What's your outlook for residential real estate investing over the next 6 months compared to today?
  
  
• Expected Home Price Increases - What do you expect home prices to do over the next 6 months?
  
  
• Number of Properties Compared to Past 12 Months - How does the number of properties you plan to invest in over the next 12 months compare to the number of properties you've invested in over the past 12 months?

The Index score rose from 88 in the Spring to 106 in the Summer. Three of the four metrics in the Index showed quarter-over-quarter improvement: views on the current market rose by 15 points; outlook for the future market increased by 18 points; and belief that prices will continue to rise grew by six points. Plans to buy properties, while the lowest number in the index, declined by seven points, as more investors said they planned to buy the same

"It's interesting that investor sentiment seems to be moving in lockstep with consumer sentiment: both hit multi-year lows in April, but have been trending up since," said RCN Capital CEO Jeffrey Tesch. "In the case of investors, this could be due to market conditions that are shifting at least slightly in their favor, such as inventory of homes for sale rising by 30% from last year and the rate of home price appreciation slowing down significantly, which improves affordability."

Flippers Continue to be More Optimistic Than Rental Investors

Fix-and-Flip investors were once again more positive about market conditions than were rental property investors. Over 53% of flippers believe that market conditions have improved over the past year, compared to only 33% of rental property investors. Even that relatively low percentage of rental property investors represented a significant improvement from the previous quarter, when only 17% of those investors said that conditions had improved. The gap was narrower when looking to the future: 40% of rental property investors believe conditions will improve over the next six months, while 52% of flippers do. Similarly, 22% of fix-and-flip investors believe that today's market is worse than last year's, while about 33% of rental property investors noted a decline in the market.

Both rental property and fix-and-flip investors agree that home prices will continue to rise: 59% of all respondents, 65% of flippers, and 50% of rental investors agree. But investors believe that home price appreciation is slowing down: almost three quarters of the respondents expect prices to decline, stay flat, or rise by less than 5% in the next year.

In some markets, home prices and asking rents have begun to decline, and investors have had to adjust their business models to compensate. About 25% have reduced their asking rent price, or the list price of a home they're selling. About 23% have opted to do less investing while waiting for market conditions to improve. And another 26% say that they haven't had to make any concessions yet, but anticipate that they'll need to do so in the next six months.

Purchase plans for investors over the next 12 months are tempered somewhat: 26% plan to stay on the sidelines and not make any purchases; 46% plan to buy five or fewer homes; 23% expect to buy between 6-10; and only six percent plan to buy more than 11 properties. Overall, this is about the same number of properties that 50% of the respondents bought in the prior 12 months; fewer property purchases for 40%; and more for just 10%.

Most investors continue to do business close to home: 82% buy properties in the city, county, or state in which they live, and only 11% buy exclusively out of state.

Investors Concerned About a Recession, Feeling the Impact of Trump Policies

Almost 57% of investors expect the U.S. economy to enter a recession in the next 12 months, which could be a contributing factor to the relatively high number of respondents who plan to buy fewer properties this year – or plan to buy none at all.

The impact of Trump Administration policies regarding tariffs and deportation haven't been quite as dramatic as investors expected in previous surveys. When asked in the Spring survey what the impact of higher tariffs might be, 60% of investors were concerned about increased costs, 47% worried about supply chain disruptions, and 40% felt that tariffs would result in reduced profit margins. In contrast, 45% of the respondents to the Summer survey claimed to have seen increased costs; 25% said they'd experienced supply chain disruptions, and 30% said there had been an impact on profit margins. Over 28% of the investors surveyed said they'd seen no impact at all on their business.

Survey results were much closer when investors were asked about the impact of large-scale deportations. In the Spring survey, 48% of investors were concerned about labor costs increasing, while about 39% said they'd actually seen this happen. Some 47% expected deportations to make it harder to find qualified laborers, and that has been true for 45% of respondents. And 33% didn't expect deportations to have any effect on their business, a percentage validated by the 34% who said they hadn't seen any impact in the Summer survey.

"It appears that investors' early fears about the impact of the tariffs and deportations being implemented by the Trump Administration on their businesses and on the economy have been worse than the reality – at least so far," said Rick Sharga, CJ Patrick Company CEO. "So it seems that investors are approaching the second half of 2025 with more optimism. Cautious optimism, to be sure. But a more positive outlook than we've seen in the past few quarters."

High Cost of Financing Still Cited as Biggest Challenge – Insurance a Growing Concern

The high cost of financing continues to be the most frequently cited challenge by investors, as it has been since the inception of the survey, noted by 50% of the respondents. Rising home prices (34%), competition from other investors (34%), lack of inventory (33%), and the rising cost of material and labor (25%) were the other challenges most frequently mentioned. While the top three challenges cited were consistent with prior surveys, the percentage of respondents citing them were all lower quarter-over-quarter. Future challenges cited by investors in the survey were almost identical, although the percentages varied slightly. One other potential future challenge – the inability to secure financing – was mentioned by 25% of the investors.

Insurance-related issues – rising costs and limited availability – are a growing concern among all investors, with 73% saying insurance was an important consideration in their investment decision-making and 56% claiming that insurance problems had caused them to miss out on a deal. The issue is of critical importance in states hit hardest with extreme weather events, such as California and Florida. Fix-and-flip investors in Florida (90%) and California (86%) were much more likely to consider insurance a major factor in their investment plans. This is possibly because more of them lost out on a deal than their peers across the country: 81% of Florida flippers and 64% of California flippers had an insurance-related deal failure. And the situation seem even more dire for rental property investors in Florida, where 100% of the respondents included insurance in their investment decision-making and 85% claim to have lost out on a deal due to insurance.

About RCN Capital
RCN Capital is a South Windsor, CT-based national, direct, private lender. Established in 2010, RCN provides investment loans for the purchase or refinance of non-owner-occupied residential properties. The company specializes in new construction financing, short-term fix & flip and bridge financing, and long-term rental financing for real estate investors. For more information on RCN Capital and RCN's loan programs, visit www.RCNCapital.com.

About CJ Patrick Company
Founded in 2019, CJ Patrick Company is a Market Intelligence and Business Advisory firm working with companies in the real estate and mortgage industries. Visit www.cjpatrick.com for more information.

About the RCN Capital/CJ Patrick Investor Sentiment Index™ (ISI)
The RCN Capital/CJ Patrick Investor Sentiment Index™ (ISI) was designed to track the pulse of real estate investors across the country and gauge market outlook. The ISI is based on a quarterly survey of residential real estate investors and focuses on their responses to four specific questions:

• Current Market Outlook - How does the environment for residential real estate investing compare to one year ago?
  
  
• Future Market Outlook - What's your outlook for residential real estate investing over the next 6 months compared to today?
  
  
• Expected Home Price Increases - What do you expect home prices to do over the next 6 months?
  
  
• Number of Properties Compared to Past 12 Months - How does the number of properties you plan to invest in over the next 12 months compare to the number of properties you've invested in over the past 12 months?

More detailed methodology available upon request

SOURCE RCN Capital