Housing signals turn mixed as investors weigh rising prices against falling rents

Real estate investors are showing guarded confidence so far in 2026 as home prices continue to notch steady gains while rents fall at the fastest clip in years.

A new investor sentiment survey from private lender RCN Capital shows real estate investors broadly expect conditions to improve this year, even as many plan to limit new acquisitions and grapple with high financing and insurance costs. In the firm’s Winter 2025 Investor Sentiment Index, the gauge held at 101 in the fourth quarter of 2025, its seventh reading above 100 since 2023 and a signal of “a generally positive outlook.”  

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Some 38% of investors surveyed expect market conditions to improve in 2026, while only 19% foresee deterioration.  However, 34% say they do not plan to buy any properties over the next 12 months, and more than half intend to purchase roughly the same number as last year, suggesting optimism tempered by caution.  Flippers are notably more bullish than long-term rental owners, both in their market outlook and in their acquisition plans.

That split is playing out against a backdrop of moderate but persistent home-price appreciation. The latest S&P CoreLogic Case‑Shiller data show the US National Home Price Index rising 4.1% year over year in January 2025, up from a 4% gain the prior month. The 10‑City Composite advanced 5.3% and the 20‑City Composite 4.7%, with New York leading major markets at a 7.75% annual increase, while Tampa posted a 1.5% decline.  

Broad US home-price indices look more like an inflation-plus asset than a speculative momentum trade. But market-level dispersion argues for selective exposure through managers who can lean into relative value between metros, property types, and business plans.

At the same time, the White House is highlighting an outright correction in rents. According to a recent administration article citing Apartment List data, national median rent has fallen to its lowest level since 2022, registering a sixth consecutive monthly decline in January and a 6.2% drop from its prior peak.  One outside analyst quoted by the administration put it bluntly: “2026 is shaping up to be one of the more renter-friendly periods we’ve seen in a decade.”  

That dynamic is already feeding back into investor psychology. RCN’s survey finds that more than half of investors still expect home prices to rise over the next six months, but rental-focused buyers are more cautious than flippers, and many report a perceived oversupply of rental units after a wave of apartment deliveries over the past 18 months.  For income-focused strategies, softer rents pressure near‑term cash yields even as financing conditions slowly improve.

Cost of ownership

Financing costs remain a swing factor. Just under 24% of surveyed investors expect mortgage rates to climb further in 2026, while roughly 44% anticipate little change and a small but growing share expects rates to slip below 6%.  Lower borrowing costs would bolster leveraged returns for both public and private real estate vehicles, but the survey suggests most participants are preparing for a plateau rather than a rapid reset.

Insurance costs and availability are another binding constraint. Nearly three quarters of investors told RCN that insurance issues influence their decisions, and more than half say they have missed at least one deal because of insurance-related factors, with flippers especially affected.  For allocators, that underscores the importance of underwriting climate and catastrophe exposure, as well as managers’ ability to navigate shifting carrier appetites and pricing.