The CRE Finance Council (CREFC) said its Third-Quarter 2026 Board of Governors Sentiment Index fell 17.5% to 83.3 from 101.0 in Q2, its lowest reading since Q3 2023’s 82.7. The decline was broad-based: all nine core questions weakened quarter-over-quarter. The interest rate and economic outlook questions posted the largest declines.

Ninety-two percent of survey respondents expect mortgage and cap rates to weigh negatively on CRE finance businesses, up from 53% in Q2 and the most negative rates reading since Q3 2022. Sixty-two percent now expect the U.S. economy to perform worse over the next 12 months, up from 24% in Q2 and the highest share since Q1 2025.

“This is the most negative our board has been in three years,” said Raj Aidasani, managing director, CREFC. “Our members’ concerns now extend past the next Fed decision to inflation, fiscal deficits and the outlook for long-term borrowing costs.”

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