The May 2026 Kiavi Investor Pulse finds the fix-and-flip market may be improving year-over-year but diverging sharply by region, with the Burns + Kiavi Fix and Flip Market Index rising to 63 in Q1 2026, up 5 points annually. Foreclosure starts rose 20% and bank repossessions climbed 45% from the previous year in Q1 2026, potentially expanding distressed deal flow heading into summer. A record 47% of flippers plan to hold more homes as rentals in 2026, though rental fundamentals in Texas and Florida may remain weaker than in Midwest and coastal markets.

Key Takeaways

• Kiavi is rolling out self-serve Automated Draws for bridge borrowers, giving direct borrowers more control over the draw process and inspection access.
• The Burns + Kiavi FFMI rose to 63 in Q1 2026, up 5 points year-over-year, with all three subindices above 60.
• 47% of flippers may keep more homes as rentals in 2026, the highest share in four survey years, per JBREC.
• Foreclosure starts rose 20% year-over-year in Q1 2026, with bank repossessions up 45%, per ATTOM.
• National pending home sales may have reached their highest level since 2023 in April, suggesting the buyer pool could be improving, per Redfin.

Kiavi Investor Pulse: May 2026 Real Estate Market Trends and Financing Updates

Welcome to the May 2026 Investor Pulse. Every month, we round up the market data, financing signals, and product updates that may matter most to your next deal. Here is what moved the needle in April.

This month at a glance:

• Fix-and-flip sentiment rose for the second straight quarter
• Foreclosure inventory increased, potentially expanding distressed deal flow
• Buyer demand improved nationally, though regional gaps remain wide
• A record share of flippers are pivoting to rental holds, but the numbers may not support it everywhere
• Kiavi launched self-serve Automated Draws for bridge borrowers

Fix-and-Flip Sentiment Rose for the Second Straight Quarter

The FFMI hit 63 in Q1 2026, up 5 points year-over-year.

The Burns + Kiavi Fix and Flip Market Index rose to 63 out of 100 in Q1 2026, up from 62 in Q4 2025 and 5 points above the same quarter last year. All three subindices came in above 60: current sales activity at 62, expected sales over the next six months at 66, and deal availability at 64. Values above 50 indicate expansion relative to seasonal norms.

Source: John Burns Research and Consulting, Q1 2026 Burns + Kiavi Fix and Flip Survey

The forward-looking subindex at 66 may be the most useful number here. It suggests flippers broadly expect conditions to stay constructive through mid-year, even as economic uncertainty holds the top spot on the risk list. 37% of flippers rated current sales as "good," up from 31% one year ago.

The regional story may be less uniform. The Northeast, Northwest, and Northern California appear to be outperforming on both deal demand and exit pricing. Florida and Texas remain some of the weakest markets for flipped home sales, with softer buyer demand and longer days on market weighing on margins in both states.

Kiavi Tip: Regional conditions vary significantly. The Arizona fix-and-flip market comparison and Massachusetts fix-and-flip market analysis break down local conditions across multiple cities if you are active in either state.

Foreclosure Inventory Is Rising. Here Is What That May Mean for Deal Flow.

Foreclosure starts up 20% YOY. Bank repossessions up 45% YOY.

According to ATTOM's Q1 2026 U.S. Foreclosure Market Report, 118,727 U.S. properties carried a foreclosure filing in the first quarter, up 6% from Q4 2025 and up 26% year-over-year. The numbers that matter most for active investors:

Source: ATTOM's Q1 2026 U.S. Foreclosure Market Report

Foreclosure starts could often be a leading indicator of future distressed inventory. A 20% annual increase suggests REO and pre-foreclosure supply could continue building through Q2 and Q3. Bank repossessions up 45% year-over-year is the most actionable figure for real estate investors running distressed acquisition strategies. ATTOM CEO Rob Barber noted that volumes remain below historical peaks and may reflect gradual normalization rather than a systemic crisis.

State-level REO concentration may mirror the same regional softness in the JBREC data. The largest year-over-year REO increases were in Florida (487 to 1,014), Colorado, Alabama, Washington, and Oregon. Florida's number is especially notable given that Sunbelt flippers are already navigating softer buyer demand and longer days on market.

The Buyer Pool May Be Improving Nationally

Pending home sales hit their highest level since February 2023 in April.

National buyer demand data from Redfin points to potentially improving market conditions heading into spring. The median U.S. home sale price rose 2.4% year-over-year in April 2026, the largest annual gain in 13 months. Pending home sales climbed to their highest level since February 2023, and existing home sales reached a seasonally adjusted annual rate of 4.33 million, also the highest since February 2023.

The rate environment is also modestly more favorable than a year ago. The 30-year fixed-rate mortgage averaged 6.51% as of May 21, 2026, down roughly 35 basis points from the same week one year prior. Rates in the 6-7% range could continue to compress the qualified buyer pool at entry and mid-price tiers, but the annual improvement may incrementally expand demand for flipped homes.

The regional picture for real estate investor exits tends to track closely with general buyer demand:

Source: Redfin Housing Market Data, April 2026; JBREC Q1 2026 Fix-and-Flip Survey

A Record Share of Flippers Are Pivoting to Rentals

47% of flippers plan to hold more homes as rentals in 2026, a four-year high.

According to JBREC, 47% of flippers surveyed plan to keep more properties as rentals in 2026 compared to their strategy one year ago, the highest share in the survey's four-year history. Two-thirds of Texas flippers are planning the pivot, the highest of any region. Florida and Southeast flippers are following close behind.

The rationale makes sense on the surface: in markets where buyer demand has softened and exit prices have compressed, holding may look better than selling at a disappointing margin. But the rental data suggests caution, particularly in the same Sunbelt markets driving the trend.

RealPage Market Analytics shows U.S. apartment occupancy at 95.2% in April 2026, improving from a Q1 trough of 94.9%, with rents posting four consecutive months of mild gains. The regional breakdown tells a more complicated story:

Source: RealPage Market Analytics, April 2026; JBREC Q1 2026 Fix-and-Flip Survey

The South appears to have gone nearly three years without meaningful annual rent growth, per RealPage. For flippers in Texas and Florida planning rental holds, the rental market in those regions may not immediately offset the compressed flip margins that drove the pivot in the first place. Midwest and coastal markets, by contrast, are showing steadier rent gains of 2-4% annually.

One important caveat: RealPage figures cover multifamily apartments. Single-family rental dynamics at the zip code level may vary, and local MLS data could offer a more precise read on SFR demand in a specific submarket.

Kiavi Tip: If you are working through the hold-versus-sell decision, the DSCR loan BRRRR refinance guide and the build-to-rent versus BRRRR comparison break down how the refinance step may work in today's rate environment.

Kiavi Is Rolling Out Self-Serve Automated Draws for Bridge Borrowers

Direct bridge borrowers will soon be able to request draws, track status, and access inspections 24/7 from their dashboard.

Kiavi is currently rolling out upgrades to its borrower dashboard that are designed to give direct bridge borrowers more control over the construction draw process. The updates are being introduced in phases and add a dedicated Draws page with three capabilities:

• Self-serve draw requests: Submit draw requests directly through the portal, without waiting on manual intake.
• Full draw visibility: Track draw status, view complete draw history, and monitor remaining holdback funds in real time.
• 24/7 self-inspection access: Begin the inspection process immediately through Kiavi's third-party inspection partners, with no scheduling required.

For bridge borrowers, faster draw turnaround may reduce carrying costs and help keep renovation timelines on track. Current availability may vary; contact your Kiavi representative for details on access timing. More on bridge loan options at kiavi.com/loans/bridge-loans.

In the News

Kiavi's Q1 2026 Fix-and-Flip Survey data was covered in Scotsman Guide, which highlighted how price declines and demand uncertainty are complicating the outlook for flippers nationally, with particular focus on the geographic divergence between the Sunbelt and supply-constrained markets.

Separately, Kiavi's Tom Hallock, VP and Head of Construction Lending, discussed build-to-rent and housing trends in ApartmentBuildings.com, offering context on how institutional capital is approaching new construction and rental demand as the single-family BTR sector continues to evolve.

For a broader view of what real estate investors were tracking at the start of 2026, the IMN SFR East recap is worth reading alongside this month's JBREC data.

Final Thoughts

The April data points to a market that could be improving at the national level but diverging sharply by region. The FFMI is up, buyer demand is ticking higher, and foreclosure inventory may be opening new deal sourcing lanes heading into summer. At the same time, renovation costs are at a post-pandemic high, economic uncertainty remains the top flipper concern, and the rental pivot story in Texas and Florida may be more complicated than the headline number suggests.

Execution quality, accurate cost estimation, and market selection may matter more right now than broad market sentiment. If you are working through the numbers on your next deal, pricing out a bridge loan at kiavi.com/loans/bridge-loans is a useful starting point.

Disclosures

This post reflects market data and Kiavi product details available as of May 29, 2026, and is subject to change. Product features and availability may vary.

Loans are for real estate investment purposes only and are not for personal, family, or household use. All loans are subject to Kiavi's standard underwriting, credit approval, and property valuation. Not all applicants will qualify. Final loan terms are contingent on several qualification factors, including credit history, income, investment experience, and the selected loan term.

This information is provided for educational and informational purposes only and does not constitute legal, tax, or investment advice. While Kiavi strives for accuracy, market data is subject to change without notice. Past performance does not guarantee future results. Loans are made or arranged pursuant to a California Financing Law license. For full state licensing and additional state-specific disclosures, please visit kiavi.com/legal/disclosures.

Frequently Asked Questions (FAQs)

What Is the Burns + Kiavi Fix-and-Flip Market Index?

The Burns + Kiavi Fix-and-Flip Market Index (FFMI) is a diffusion index developed by John Burns Research and Consulting in partnership with Kiavi. It is based on a proprietary quarterly survey of approximately 250 fix-and-flip investors nationwide and measures three subindices: current flipped home sales versus seasonal norms, expected sales over the next six months, and availability of homes to purchase. Scores above 50 indicate expansion relative to seasonal expectations. The overall FFMI rose to 63 in Q1 2026, up 5 points year-over-year.

Why Are So Many Flippers Holding Homes as Rentals in 2026?

According to the Q1 2026 JBREC + Kiavi survey, 47% of flippers planned to keep more homes as rentals compared to their strategy one year ago, the highest share in the survey's four-year history. The trend is most pronounced in Texas, Florida, and the Southeast, where buyer demand has softened and some markets have seen home price declines. However, rental conditions in those same regions tend to be softer than in Midwest and coastal markets, so investors may benefit from reviewing local rental data before committing to a hold strategy.

What Is Driving Renovation Costs Higher in 2026?

Average renovation costs per flipped home reached $79K nationally in Q1 2026, up from $75K a year earlier and more than 50% above Q1 2022 levels, according to JBREC. Tariff-related materials cost pressure and ongoing labor cost inflation are the primary contributors. Costs tend to be highest in coastal markets where labor rates and property values both support higher renovation budgets.

What Does Rising Foreclosure Activity Mean for Real Estate Investors?

Foreclosure filings rose 26% year-over-year in Q1 2026, with bank repossessions up 45% and foreclosure starts up 20%, according to ATTOM. For investors focused on distressed acquisition strategies, rising REO volume and foreclosure starts could expand pre-foreclosure deal flow over coming quarters. Volumes remain below historical peaks, so the increase may reflect gradual normalization rather than a broad market crisis. State-level REO concentration was highest in Florida, Colorado, Alabama, Washington, and Oregon in Q1 2026.

What Markets Are the Strongest for Fix-and-Flip Investors Right Now?

The Northeast, Northwest, Southern California, and Northern California regions tend to show stronger demand for flipped homes due to constrained inventory and older housing stock. Texas, Florida, and parts of the Southeast tend to face more headwinds from elevated new-build competition and softer buyer demand. Market conditions vary significantly at the metro and zip code level, so local data is a better guide than regional averages.

How Does Kiavi's New Draws Feature Work?

Kiavi is rolling out upgrades to its borrower dashboard designed to give direct bridge borrowers more control over the draw process. Once available, borrowers may be able to submit draw requests through the portal directly, track draw status and holdback balances in real time, and access third-party or self-inspection options 24/7 without waiting on manual coordination. The upgrades are designed to reduce the time between a draw request and fund disbursement, which may help investors keep renovation projects on schedule. Current availability may vary; contact your Kiavi representative for details on access timing.

*Feature details reflect Kiavi's product roadmap as of May 29, 2026 and are subject to change. Final feature availability, functionality, and timing may vary.

Additional Resources

• Q1 2026 Burns + Kiavi Fix and Flip Survey: Full survey data and analysis
• DSCR Loan for BRRRR: How the Refinance Step Works: For real estate investors evaluating hold strategies
• Bridge Loans for Fix-and-Flip Investors: Current Kiavi bridge loan options
• Rental Loans: For real estate investors refinancing into longer-term hold positions