Single-family housing investors hit three-year confidence low

Only 26% of the 300 fix-and-flip and rental professionals surveyed believe current conditions outperform last year’s market, a significant drop from the 35% reported in the first quarter. Conversely, 45% of respondents explicitly described the market as worsening—the highest level of dissatisfaction recorded since the survey began in 2023.

Jeffrey Tesch, CEO of RCN Capital, identifies a convergence of pressures driving this downturn. Beyond the direct impact of the conflict in Iran, investors are grappling with escalating renovation expenses and downward pressure on rental yields. Financing remains the primary friction point; over half of those surveyed cite high borrowing costs as their most significant hurdle. With mortgage rates currently at their highest point in more than a year, 75% of investors anticipate no immediate relief, with some bracing for further rate hikes. While large institutional players face new acquisition restrictions under the 21st Century ROAD to Housing Act, the small-to-mid-sized investors dominating this survey continue to rely on conventional and bridge loans to navigate an increasingly hostile fiscal environment.