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Retail real estate investors are optimistic about investing conditions and are looking to grow, heading into 2026, according to our BiggerPockets Pulse survey, taken in late 2025.
Despite a slow and uncertain market in 2025, investor sentiment has improved over the last 12 months, and expectations are high for 2026. Across experience levels and geographic regions, investors see opportunity in the year to come, citing diverse benefits in the current market, such as:
Lower mortgage rates
Increased negotiating leverage
Falling prices
Better inventory
As such, the vast majority of retail real estate investors are planning for an active year in 2026, prioritizing growth and optimization.
However, with lower affordability, rising expenses, and oversaturation in certain markets, tactics have to change to make the most of these new opportunities. As an investor, you can learn a lot from what other players in our industry are planning, so read on to find actionable insights about how investors are approaching the coming year from BiggerPockets Pulse.
Investing Conditions
Investor sentiment increased modestly in 2025, with our Pulse Index for the last 12 months measuring 108 (100 is neutral, and anything over 100 is positive).
A modest change in sentiment is the most that anyone could reasonably expect, as the housing market has remained stubbornly unchanged for most of the year. Home sales have ticked up, but by an almost imperceptible amount. Mortgage rates have fallen year over year, but not to a level where it’s materially changing demand. The median sales price is up just 1% to 2% year over year, depending on who you ask—so it’s essentially flat.
That said, bright spots have started to emerge. Inventory is up, leading to better deal flow and negotiating leverage. With stagnant real price growth and declining interest rates, affordability is starting to improve. Buying conditions are slowly getting better.
The combined impact of these modest shifts has lifted sentiment, but investors see the bigger changes to fundamentals coming in the near future. Building on the shifting trends of 2025, investor expectations for the next 12 months are optimistic. Our Pulse Index for the next 12 months measures 150, with 50% of investors expecting conditions to either “improve somewhat” or “improve significantly.”
Only 15% of investors expect conditions to worsen. Of these investors, most are concentrated in the more expensive Northeast and Western regions.
The causes for optimism are rather broad, as investors cite a variety of expected improvements in investing conditions:
Increasing inventory
Falling prices
Lower mortgage rates
Better negotiating leverage
These expectations are reasonable, in my view, given that positive shifts are already starting to take shape. Prices are falling in over 50% of metros as of this writing, rates have come down by almost 1% since January 2025, inventory is up about 8% YoY, and days on market are up by double digits.
It’s no wonder that investors with a long-term outlook think fundamentals are shifting for the better. After all, it would be hard for them to get much worse than where we’ve been the last few years.
Despite cautious optimism about the market, challenges remain. Investors equally cite the three biggest challenges facing retail real estate investors:
Lack of capital for new deals
Difficulty finding new deals
Rising expenses
When you look at the data by experience level, you see that newer investors are unsurprisingly worried about capital-constrained slowing growth. This is often the reality of starting an investing career, regardless of external market conditions.
Meanwhile, experienced investors are increasingly concerned about rising expenses, including insurance and taxes. Interestingly, no group seems particularly worried about falling home prices or stagnant rents.
Even though sentiment is improving, the reality is that short-term market conditions remain uncertain, and investors are increasingly focused on tried-and-true strategies that emphasize long-term returns. More than 50% of investors believe long-term rentals are the best option going forward, while 1 in 5 investors believe owner-occupied tactics like house hacking and live-in-flips will work best.
Investor enthusiasm for tactics that have shown success in recent years, such as short-term rentals (STRs) and mid-term rentals (MTRs), has waned significantly, though newer investors still show some interest—likely due to their increased cash flow potential.
With many metros seeing price corrections, trust in house flipping is low, with only 9% of investors with two to five properties preferring this strategy. However, flipping interest does increase as investors gain experience.
Given the expected improvement in investing conditions, the majority of investors (57%) intend to focus on portfolio growth in the coming year. A quarter of investors plan to focus on optimizing their existing portfolio, while less than 3% intend to downsize—all signals that retail real estate investors are focused on the long-term benefits of real estate investing far more than short-term returns.
2026 Forecasts
Heading into 2026, retail real estate investors are almost perfectly split over the direction of the housing market. The only clear consensus is that prices won’t move significantly in either direction. Only 3% of investors expect above-average appreciation of more than 5%, and similarly, only 5% of investors expect declines to surpass 5%.
Investor opinions about national home prices do seem to be influenced by the investor’s home market, however. Regions that have shown resilient appreciation rates in recent years, the Midwest and Northeast, are more likely to expect the national market to move up. Meanwhile, the South and West, which hold the majority of the markets seeing corrections, are more likely to see declines continuing.
Investors are somewhat more optimistic in their expectations for mortgage rates to fall in the coming years. Indeed, 48% of respondents expect rates to drop below 6% from their current range of 6% to 6.49%, while 35% expect rates to stay flat, and 21% think rates will increase.
Despite tepid rent growth over the last year, investors are expecting rent growth to remain positive in 2026. Investors in the Midwest, having seen strong rent growth for several straight years, are the most optimistic about continued rent increases, but very few expect the outsized rent growth of more than 5% year over year to continue into 2026.
Current Events
Beyond the housing market, investors are watching what’s happening with national macroeconomic trends and expect to factor these trends into their investing decisions in the coming year.
Generally speaking, investors have a negative view of macroeconomic conditions right now. Nearly 50% are concerned about the labor market, while only 16% have a positive view of employment conditions. And 42% of respondents feel tariffs will negatively impact their portfolios in the next 12 months, while only 4% expect a positive impact. In the meantime, 95% of investors think inflation is a concern going into the next year.
But despite these concerns, macro conditions are not the main factor guiding investing decisions for real estate investors. Less than 30% of investors say macro conditions will play a big role in their decision-making in the coming year. Experienced investors are even less concerned about the national economy (22% of those surveyed), and seem more inclined to focus on the details of their portfolios, while new investors are more inclined to change tactics based on macro trends.
Of all the questions asked in the survey, one stood out as having the broadest consensus: Investors do not like the idea of a 50-year mortgage. More than 60% have a negative view of the idea, with only 13% supporting a potential 50-year mortgage.
We’ve yet to hear any updates on whether a 50-year mortgage is coming our way, but it seems safe to say most investors will pass on it, even if it does become available.
Conclusion
As investors turn the page on a stagnant and transitional 2025, most are looking forward to better investing conditions in the year to come. Falling prices, improved inventory, and better deal flow can all be a boon to the many long-term-focused investors who are seeking to grow their portfolio in 2026.
If you’re interested in reading the full report, click here!
How does the general sentiment of the BiggerPockets community stack up to your own feelings? Let us know in the comments section.
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About the survey
BiggerPockets is a community of retail real estate investors, with over 3 million members, who in aggregate make up the largest bloc of residential property investors in the United States. The BiggerPockets Pulse is a quarterly survey that measures and shares the sentiment and intended behavior of this important economic force.
