The housing market today: insights from Ivy Zelman

Ivy Zelman, EVP and Co-Founder of Zelman, a Walker & Dunlop company offered a grounded assessment of where the U.S. housing market stands today and what lies ahead on a recent episode of the Walker Webcast with Willy Walker, CEO, Walker & Dunlop. Ivy’s message was consistent throughout: the industry is not facing a housing supply crisis, but an affordability one. Policy, capital, and consumer behavior are all colliding around that reality.

Davos delivered clarity, but no breakthrough

Willy opened the conversation by asking Ivy for her immediate takeaways from the President’s Davos remarks.

Ivy said the speech largely reaffirmed existing policy positions, particularly the administration’s desire to avoid actions that would negatively impact existing homeowners by pushing home prices lower. She noted there had been speculation about aggressive measures, such as flooding the market with new supply, restricting mortgage rate buydowns, or forcing sharper price discovery, but none of those materialized.

What was reinforced was the administration’s stance against institutional ownership in single-family rentals, a position Ivy said continues to poll well politically. Notably absent, however, was any major new federal program aimed at expanding affordability or supporting would-be homeowners.

“We thought there would be a big program announced,’” Ivy said, referring to expectations of a sweeping housing initiative. “I’m not sure that it won’t still happen, but it didn’t get announced today.”

For a deeper analysis of the policy climate leading up to the President’s speech at Davos, read this article by Alan Ratner, managing director - homebuilding at Zelman, a Walker & Dunlop company.

Affordability is the real problem

From there, the conversation turned squarely to affordability. Ivy was unequivocal: the core issue in housing today is not supply volume, but price points.

“We have a shortage of affordable, available homes,” she said, pointing to elevated levels of young adults living at home and delayed household formation. When housing costs reach attainable levels, demand follows, but in many markets, that threshold is simply out of reach.

“If we told our 25-year-olds, ‘You can rent an apartment in New York for $1,000 a month,’ you’d see a lot of young adults leave home,” Ivy noted. “But that doesn’t exist.”

Why rents are flat, and why relief will take time

Multifamily investors who expected 2025 to mark a clean turning point have instead faced a more uneven reality. Ivy acknowledged that absorption was strong earlier in the year as new supply was delivered, but momentum faded in the fourth quarter as demand came under pressure.

As a result, rent growth across the U.S. has been largely flat, with sharp divergence by market. Ivy revised her firm’s 2026 rent growth forecast down to 1.9 percent, citing prolonged oversupply, particularly in the Sunbelt.

“Some markets will be flat. Some will be up. And some are still absorbing several years of supply, likely through 2027,” she said.

For granular, data-driven analysis of what’s happening in multifamily today, download Zelman’s complimentary Apartment Operators Survey.

Institutional capital and the SFR reset

Policy uncertainty around institutional ownership of single-family rentals is already influencing capital behavior. While Ivy noted that build-to-rent communities remain permitted, ambiguity around mixed-use developments has caused some lenders and investors to pause.

Willy shared an example of a $70 million build-for-rent construction loan that was pulled following the President’s comments. Ivy contrasted that with Invitation Homes’ decision to move forward with a development acquisition, suggesting that new construction may be the primary path forward for institutional players.

For builders, the potential loss of SFR pre-sales, typically around 5 percent of volume, removes a useful source of capital and balance sheet flexibility.

Builders, spec homes, and incentives

Despite affordability challenges, builders are still moving product, but almost entirely through incentives. Ivy noted that more than 90 percent of new home sales today are spec homes, supported by aggressive mortgage rate buydowns.

In many cases, buyers cannot qualify without rates being reduced below 5 percent, putting sustained pressure on margins. Custom homes, by contrast, rarely carry buydowns due to the financial risk of long construction timelines.

Builders, Ivy explained, are caught in a circular challenge. They must build without buyers in place, and the only way to generate demand is through costly incentives.

Cost pressures that won’t go away quietly

Land and regulatory costs remain major obstacles to affordability. Ivy highlighted impact fees that can range from roughly 5 percent of sale price in markets like Houston to as much as 15 percent in markets like San Francisco.

Lot prices, meanwhile, have continued to rise, even as other cost categories have stabilized. “Lot prices are probably the biggest impediment to truly providing affordable housing,” Ivy said, noting that this is not an issue easily solved by policy intervention.

The lock-in effect is easing, but slowly

Higher rates have kept many homeowners frozen in place, unwilling to give up mortgages below 5 percent. Ivy noted that the “stuck factor” peaked around 90 percent in 2022 but has already declined to roughly 72 percent, with expectations it will fall into the high 50s by 2027.

Life events, such as family growth and job changes, will ultimately drive movement, but the process will be gradual.

To learn more about becoming a Zelman client and unlocking industry-leading housing research and insights, contact Kim Gray, Senior Vice President.

Where opportunity still exists

Ivy pointed to markets with limited new development as areas of potential opportunity. On the multifamily side, that includes California and the Pacific Northwest. For single-family housing, she highlighted the Midwest and parts of the Southeast where affordability remains more achievable.

“If I were looking,” she said, “I’d focus on providing more affordable housing—taking risks in the Midwest and finding opportunities in the Southeast.”

Political risk, however, continues to influence capital allocation decisions, particularly in markets with aggressive regulatory environments.

The Walker & Dunlop perspective: affordability is the battleground

Ivy’s insights reinforce a core belief at Walker & Dunlop: the future of housing will be defined by who can deliver affordability intelligently, sustainably, and at scale.

This is not a moment for broad-brush solutions or waiting for policy alone to act. It is a moment for precise market-by-market analysis, creative capital structuring, and disciplined execution.

To dive deeper into Ivy’s insights, watch the webcast.