Housing at a Crossroads with Kris Mikkelsen, Justin Nelson, & Ivy Zelman

They shared their perspectives on key market indicators - including consumer confidence, inflation, cap rates, and Treasury yields - while also exploring broader trends shaping the landscape, from shifting mobility patterns and population growth to the impact of AI. The conversation also touched on where they see the greatest opportunities ahead, highlighting areas of demand and growth despite ongoing macroeconomic volatility.

1. Who are Kris Mikkelsen, Justin Nelson, and Ivy Zelman?

• ‍Kris Mikkelsen is EVP & Co-Head of Capital Markets at Walker & Dunlop, where he leads investment sales, debt, and structured finance strategy across commercial real estate.‍
• Justin Nelson is a Senior Managing Director at Walker & Dunlop, focused on debt capital markets, including multifamily financing, construction lending, and institutional capital relationships.‍
• Ivy Zelman is EVP & Co-Founder of Zelman, a Walker & Dunlop Company, and one of the most respected housing market analysts, specializing in homebuilding, demographics, and housing policy.

2. What are the top reasons to listen to this webcast?

• A timely breakdown of the U.S. housing market in 2026, including why single-family demand is weakening while multifamily recovery is delayed.
• A clear view into capital markets, including why debt liquidity is strong but transactions remain stalled.
• Actionable insights on housing policy, migration trends, and where investors should be looking ahead of a potential recovery.

3. Why is the U.S. housing market at a crossroads in 2026?

The U.S. housing market is at a crossroads in 2026 due to conflicting forces: weak affordability and declining consumer confidence are slowing single-family demand, while multifamily faces excess supply despite steady underlying demand. At the same time, capital remains abundant, but transaction activity is muted as investors wait for clearer pricing, operating fundamentals, and interest rate direction.

4. What is Ivy Zelman’s outlook for the single-family housing market?

Zelman describes the single-family market as choppy, with affordability constraints and low consumer confidence weighing on demand. She sees relative strength in regions like the Midwest and Carolinas, while overbuilt markets such as Texas and parts of Florida remain under pressure. She emphasizes that confidence—not just mortgage rates—is the primary driver of housing demand today.

5. What is Kris Mikkelsen’s outlook for multifamily fundamentals?

Mikkelsen says multifamily recovery has been delayed due to excess supply, with absorption slowing meaningfully in 2025. However, he expects 2026 to mark the beginning of recovery, with stronger rent growth and fundamentals emerging in 2027 as new construction starts have dropped sharply.

6. What is Justin Nelson seeing in debt capital markets right now?

Nelson reports that debt capital remains highly liquid across banks, agencies, and private lenders. Financing is available even in higher-supply markets, allowing investors to extend business plans and position ahead of a recovery. He notes that early movers are already deploying capital before institutional investors re-enter at scale.

7. Why are real estate transaction volumes still low?

Despite strong liquidity, transaction volumes remain muted because investors are waiting for improved operating fundamentals rather than rate cuts. Many sellers are also reluctant to reset pricing, creating a growing backlog of assets that will likely be forced to trade as timelines shorten.

8. What are the biggest risks from housing policy and build-for-rent legislation?

Zelman warns that proposed build-for-rent legislation could force institutional investors to sell assets within a fixed timeframe, reducing valuations and discouraging new supply. Mikkelsen adds that restricting buyer pools would distort pricing, and both emphasize the risk of higher rents and reduced housing availability as unintended consequences.

9. Where is housing demand coming from—and why does it feel weaker?

Zelman explains that household formation has slowed, with more young adults living at home or doubling up. Mikkelsen adds that demand remains positive but uneven, and is masked by high retention rates as renters stay in place longer. Migration patterns are also shifting away from overbuilt Sunbelt markets toward supply-constrained regions.

10. What are their predictions for interest rates and the real estate market in 2026?

Mikkelsen expects interest rates to trend modestly lower, while Nelson agrees rates are likely to decline as economic growth slows. Zelman sees a more complex outlook, warning that energy-driven inflation could keep rates elevated in the near term before easing.

From an investment perspective, Nelson highlights early entry opportunities in oversupplied multifamily markets, Mikkelsen points to long-term value in supply-constrained assets and selective development, and Zelman expects increased M&A activity and selective equity opportunities across housing-related sectors.

This discussion provides a forward-looking view on the U.S. housing market, multifamily recovery, interest rates, and real estate investment strategy heading into 2026.

Watch or listen to the replay.