A BiggerPockets analyst says rising carrying costs and economic uncertainty are changing what pencils out for real estate investors
Elevated mortgage rates have been a major story of the real estate investment market for three years. However, the conversation among investors is shifting from what they are paying to borrow and toward what they are paying to hold.
A new survey shows that the concerns about mortgage rates are no longer the biggest concern for investor clients.
BiggerPockets tracks investor sentiment through a quarterly survey of its community of more than three million members, and the Q3 2026 results show that difficulty finding good deals has become the single biggest challenge investors report, chosen by nearly 30% of respondents, up from 26% in Q2. High mortgage rates, once the largest complaint, have faded to 13%.
What pushed mortgage rates down the list is a combination of rising insurance premiums, property taxes, and maintenance costs that are eating into cash flow before investors can even think about their financing terms.
Dave Meyer (pictured top), chief investment officer at BiggerPockets, said investors are growing more concerned with the rapid increase of costs outside of the loan itself.
"I think rising expenses feel a little bit out of your control," Meyer told Mortgage Professional America. "Taxes, surely, you can forecast them a little bit with home prices. But insurance, it just feels like it's going up and up and up, and it creates a level of uncertainty for investors that is uncomfortable."
Finding the right deals
Meyer said the insurance problem extends well beyond the investor community, as even residential homeowners are feeling the squeeze.
"I think this is one of the big questions, not just for investors, but the housing market in general," he said. "Even in areas you wouldn't expect, we're starting to see coverage decline, people moving out. How are we going to contain insurance costs? Because it's really straining homeownership in a lot of areas of the country."
As costs continue to rise, investors are having a harder time making the math work on investment properties. With insurance costs unpredictable and taxes rising in step with recent appreciation, it becomes more important to get properties under contract at the right price. That is putting pressure on a market where sellers are still anchored to 2022 highs.
The survey data reflects that shift, with investors considering the ability to negotiate as their biggest opportunity at 27.5% in Q3, and falling prices climbing to 24% as a perceived opportunity, up from 17.5% in Q2. The share counting on lower mortgage rates fell from 28.5% in Q1 to 12.5% in Q3, with a recent Redfin report showing seller concessions at record highs.
"As an investor, you can underwrite any deal if you can get it at the right price," he said. "But right now there is a bit of a stalemate where sellers have expectations that are anchored to recent highs from 2022. Buyers are saying, ‘I can't pay that anymore.’"
AI uncertainty freezing the market
It’s not just high insurance and tax costs, or even elevated mortgage rates, causing investors to hesitate.
BiggerPockets' Q3 data shows that 37.5% of investors expect AI job displacement to have a negative impact on housing and rental demand over the next 12 months, while 49.5% remain neutral. Meyer said the numbers reflect uncertainty even before job losses show up in the data.
"It's created an environment of fear, even though those predictions have not yet come to fruition," he said. "In times of uncertainty, people just pull back on large financial decisions. You see this even in the lead-up to presidential elections. People don't buy houses at the same rate."
He said the labor market data itself is not alarming, with layoffs and continuing unemployment claims remaining surprisingly resilient. However, a few high-profile rounds of cuts from Amazon, Microsoft, and other large technology employers have had a visible effect in tech-heavy markets like Seattle, where Meyer lives.
He said the financial strain on potential renters and buyers runs deeper than the job market alone. Consumer savings rates are at their lowest in years outside of a brief spike during COVID, credit card and student loan delinquencies are rising, and those pressures are hitting the segment of the market that drives new demand.
"If the savings rate slows, we are probably likely to see less participation in the housing market, both from investors and homeowners, especially on the earlier side — first-time homeowners or new people who are wanting to get into real estate investing but haven't built out a portfolio where they have equity and capital sources to draw on," he said.
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