Entering 2026, several housing market predictions were cautiously optimistic. Not many real estate investors were anticipating significant tailwinds, but the general consensus was a positive one by several metrics. The war in Iran has shifted that outlook.
This shift was detailed in BiggerPockets’ Q2 2026 Investor Pulse Survey. The survey’s forward-looking Pulse Index, which measures investor expectations for housing conditions over the next 12 months, fell from 150 in Q1 to 112 in Q2 (the scale rates 100 as neutral). According to the survey, the decline is heavily impacted by the war and how AI could alter the labor market.
In an exclusive interview with TheStreet, BiggerPockets Chief Investment Officer Dave Meyer detailed these results while explain how despite the decreasing sentiment among investors, this housing market is actually creating new opportunities for buyers — particularly those focused on maximizing what has shifted in their favor.
“With modestly declining prices, and rents staying flat — likely even growing a little bit in the next couple years — cash flow prospects are going to get better,” Meyer told TheStreet. “Which is something we haven’t said in a decade, maybe. And the opportunity for value-add investing is as strong as ever.”
BiggerPockets survey shows housing market mood has shifted
In addition to current events shaping the housing market sentiment, a downgrade in mortgage-rate expectations has been a primary driver of the broader decline. As the BiggerPockets survey notes, mortgage rates have increased around 0.4% since the war in Iran began. Additionally, the Consumer Price Index increased nearly 0.9% in March (via U.S. Bureau of Labor Statistics).
Per the survey, those two pressures are the primary drivers behind the reset in investor expectations. As a result, many investors are having to shift their focus from mortgage rates to where the opportunities actually reside in 2026. Negotiating leverage, deal flow, and falling prices are among the more meaningful openings.
“A lot of real estate investors have been waiting for four straight years now for mortgage rates to come down,” Meyer told TheStreet. “I’ve been trying to tell people that’s not going to happen, or it’s unlikely to happen. And honestly, there’s some positive to this, that people are just accepting that this is the new reality. Once you accept that, there are opportunities.”
Meyer added, “You just have to start framing it — instead of ‘Hey, the market’s going to help me and provide these tailwinds with lower mortgage rates,’ start saying, ‘Okay, the reality is mortgage rates are staying in the mid-sixes. What can I do today with those conditions?'”
More on housing market and mortgage rates:
- Zillow predicts home values, housing market change
- Americans face unexpected homebuying shift after Wednesday’s news
- Experts send strong message about decreasing mortgage rates
As previously stated, those opportunities can present themselves in the form of cash flow, value-add potential, and other benefits that always exist in normal investing conditions — which Meyer believes the current market more closely reflects than certain headlines may suggest.
What buyers can take from the BiggerPockets survey
The Q2 Investor Pulse Survey displays a real cooling in expectations, but it doesn’t show investors heading for the exits. The survey determines many respondents still plan to maintain or grow their portfolios in 2026, they’ve just adjusted what they’re pursuing. For everyday buyers, similar logic can apply.
While conditions aren’t what they were in the early 2020s, they haven’t eliminated the opportunity for real estate investing to outperform other wealth-building strategies.
“I believe that the conditions that we’re in aren’t positive, but they’re not that far off from a normal investing market,” Meyer told TheStreet. “What we saw from 2013 to 2023, I call the Goldilocks era, because it was just an unusually uncommon — probably once-in-a-lifetime — opportunity for real estate investors, where everything was totally perfect.”
Still, slower competition, longer days on market, more motivated sellers, and a renewed focus on fundamentals can produce the outcomes real estate investors chase. Meyer detailed what that can look like in 2026.
“Think about things that you can control, like cash flow,” he said. “Think about tax benefits, amortization — all these things still create a return that I believe will average better than the S&P 500 going forward, even without appreciation. And if you get appreciation, great. That’s a bonus on top of everything that you’re already doing.”
Meyer added, “I also think it’s a great hedge against inflation, which we’re starting to see. And so there is good opportunity to protect your money as well. And these are the core ideas — inflation hedge, principal paydown, tax benefits, cash flow. That’s what’s always made real estate a strong investment, and it still can in today’s market.”
Key takeaways for 2026 homebuyers
- Investor confidence in the next 12 months has dropped sharply: BiggerPockets’ forward-looking Pulse Index fell from 150 in Q1 2026 to 112 in Q2 2026, but many investors remain committed to scaling.
- Rate relief expectations have been downgraded: Investors now expect mortgage rates between 6.0%–6.49%, up from the 5.5%–5.99% range projected last quarter, per the survey.
- The biggest opportunity has shifted: Investors see negotiating leverage, deal flow, and falling prices as the top 2026 opportunity — not lower mortgage rates.
- Cash flow prospects are improving: Per Meyer’s exclusive comments to TheStreet, modestly declining prices and steady rents are creating cash-flow conditions investors haven’t seen in roughly a decade.
- Value-add margins are widening: Move-in-ready homes are selling at or above asking, while homes needing renovation are falling in price, creating wider margins for value-add buyers willing to do the work.
Related: Buyers face unexpected opportunity after new housing market shift
