6 Predictions for 2026 That Could Reshape the Economy and Housing Market - BiggerPockets Real Estate Podcast Recap

Podcast: BiggerPockets Real Estate Podcast

Published: 2025-12-19

Duration: 34 min

Summary

In this episode, Dave Meyer and Ben Miller discuss the impact of AI and economic factors on real estate investments in 2026, predicting an eventual decline in interest rates and a potential stabilization of the housing market. They emphasize the mixed signals currently present in the economy and the cautious sentiment among consumers and businesses.

What Happened

Dave Meyer introduces Ben Miller, the CEO of Fundrise, to discuss the evolving landscape of the economy and its implications for real estate investing in 2026. Miller shares his belief that the real estate market has bottomed out, although he acknowledges his previous underestimations of market fluctuations over the past few years. He identifies four major forces at play: AI, interest rates, the political environment, and a significant decrease in new construction supply.

As the conversation unfolds, Miller expresses skepticism about the anticipated economic acceleration due to AI and upcoming tax incentives. He points out that while AI spending is substantial, it remains a narrow sector in the economy without broad spillover effects like those seen in housing. He foresees that the economy is currently soft, impacted by high interest rates and stagnant wage growth, leading to a general risk-averse sentiment among consumers and businesses alike.

Key Insights

Key Questions Answered

What are Ben Miller's predictions for the real estate market in 2026?

Ben Miller believes that the real estate market has bottomed, but he is cautious given the unpredictable nature of market conditions over the past few years. He identifies key factors influencing the market, such as AI, interest rates, and the political environment. Miller's perspective is shaped by a recognition of the significant changes occurring in the economy and the potential for recovery, albeit with some skepticism.

How does AI spending influence the overall economy according to Ben Miller?

Miller argues that while AI investments represent a considerable amount of capital expenditure, they are confined to a narrow segment of the economy. He acknowledges that this spending is substantial and may support the economy but doubts its ability to create widespread inflationary pressures or significantly impact sectors like housing construction, which traditionally have broader economic spillover effects.

What does Ben Miller say about interest rates and inflation?

Miller anticipates that interest rates will decline as inflation stabilizes, suggesting that the Federal Reserve may be more inclined to cut rates in the coming years. He indicates that inflation has lingered around 3% but believes that the economy is showing signs that inflation pressures are easing, which could lead to more favorable mortgage rates and improved conditions for real estate investments.

What are the implications of the current economic sentiment for investors?

Miller highlights that consumer and business sentiment is currently cautious, with many adopting a 'wait and see' approach. He believes that this risk-averse mood is prevalent due to high interest rates and a general lack of confidence in economic recovery outside of AI. This sentiment may slow down investments and hiring, impacting the overall economic landscape and real estate market.

What factors does Ben Miller think could slow down the economy?

Miller points to a combination of stagnant economic activity outside of AI, high interest rates, and the impact of tariffs as significant factors that could contribute to a slowing economy. He notes that while some sectors may see growth, the overall environment remains soft, with home builders particularly strained. He suggests that without a resurgence in broader economic confidence, the recovery may be limited.