Speaker · Updated
Ivy Zelman: latest market views
Zelman & Associates (a Walker & Dunlop company)
Summary
Co-founder of the housing research firm Zelman & Associates and its executive vice president of research and securities, known for calling the top of the U.S. housing market in 2005 and the bottom in 2012.
Chorus has 34 views from Ivy Zelman across 2 episodes on On The Tape with Danny Moses and Wealthion since October 29, 2026. Their latest calls: bullish on Berkshire Hathaway and Lennar.
Where they stand
Their latest bullish or bearish call on each company.
- Berkshire HathawayBullish ·
- LennarBullish ·
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
Democratic midterm sweep won't meaningfully fix housing affordability; local regulatory costs are the binding constraint.
Ivy argues the Democratic sweep will do little for housing. The real obstacles to affordability start at the local level: impact fees, environmental fees and zoning. Unless local municipalities are willing to cut these costs, federal government action can't fix affordability. Housing stocks still rallied after the midterms, but she doesn't think the election changes the affordability picture much.
“we don't think that the DEM sweep is going to do much of anything to really improve housing.”at 1:38
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Each 25bp drop in mortgage rates cuts monthly payments about 3%; rates are the key affordability lever.
Affordability can improve through falling home prices, falling mortgage rates, or incomes outgrowing home prices. Income growth is happening but is a slow grind. Each 25bp decline in mortgage rate cuts the monthly payment about 3%, so a 100bp drop cuts it nearly 10%. Ivy says a rate rally moves the needle. She says that to get affordability back to normal, holding other variables constant, rates would need to fall to about 4.5%. Refinancing activity and more for-sale demand usually start when rates fall about 50bp, and improving trends would need declines of at least 50bp.
“So as rates rally for every, call it, 25 basis point decline in mortgage rate, that equates to about a 3% decline in monthly payment.”at 2:50
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Tariffs won't materially lower new-construction costs; builders' scale absorbed the hit, with relief mainly for home improvement.
Tariffs have been a big headwind for suppliers and downstream home-improvement contractors. Builders, given their scale, pushed back successfully, and their sticks-and-bricks and labor costs were flat to down a few percent until the last month or two. That compares with historical increases of roughly 4-6%. So Ivy doesn't expect tariff relief to help new-construction affordability much. It may help a bit on home improvement.
“So we don't see tariffs going away really helping the affordability on the new construction side. Maybe it helps a bit on the home improvement side”at 4:02
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
ICE raids disrupted construction in a few markets, but labor is not tight nationally.
The labor market has not been tight at all. Over roughly the last three months, ICE raids in certain parts of the country have created fear that workers won't show up to job sites, even legal workers. That has disrupted construction cycles in a few markets, but it only showed up in Ivy's checks recently. If the market picks up, labor strain could return, and relief from ICE raids would be incrementally positive.
“the labor market's not been tight at all... more ICE raids in certain parts of the country that have created fear that people don't want to be on the job site”at 4:17
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Move-up housing demand is hurt by consumer confidence rather than rates; model-home traffic has dried up.
The move-up segment has been more affected by consumer confidence than by rates. Builders tell Ivy that the last six to eight weeks have brought no traffic to their model homes. Ivy hopes the post-midterm period will improve confidence and help move-up demand, but she doesn't think it changes the affordability picture enough.
“The move up market has been more impacted by consumer confidence, not by rates.”at 6:30
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Public builders' market share growth has likely peaked near 53% of new homes.
Public builders were under 10% of the market when Ivy started following them in the early 1990s and now have over 50%, about 53%. Recent acquisitions have been mostly private-sector deals. Japanese public builders and Berkshire Hathaway account for another 12% of new home sales. Ivy thinks the public builders' share growth has peaked for now.
“So with a market share growth for [public builders] is sort of, I think, peaked at the moment.”at 8:07
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Weak demographics and halted immigration will slow household growth; renters outpace owners for years.
Birth rates are below replacement and deaths are accelerating as the oldest boomers reach 80. Without a real increase in immigration, which the current administration has halted, population growth should decline substantially starting beyond 2030, and household growth will slow. Renter households are growing faster than owner households because the monthly payment gap between the median apartment and median for-sale home is almost $1,000. People stay in apartments longer and rent for longer than historically.
“the demographics look very troubling for the country's future, and we have birth rates that are below replacement.”at 9:00
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Single-family rental is better positioned than for-sale housing due to affordability and tighter supply.
Ivy is constructive on single-family rental within the housing ecosystem. Lack of affordability for for-sale homes pushes demand toward rentals. Supply is also more constrained, and single-family rental is unlikely to get the supply increase that new construction would bring.
“But single family rental is definitely better positioned because of the lack of affordability for sale.”at 11:00
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Fannie Mae and Freddie Mac privatization is dead under this administration and now further unlikely.
Ivy agrees that GSE reform, which would have spun Fannie and Freddie out of conservatorship, was dead on arrival with this administration. She says the Democratic sweep puts the nail in the coffin. Democrats would more likely want Fannie and Freddie to remain government-owned and support the housing market.
“I think that it was dead on arrival with this administration. I never thought it would come to fruition.”at 12:55
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Sunbelt home prices under pressure from rising inventory; Midwest and Northeast prices still rising on tight supply.
Sellers have refused to capitulate on price, so many pull listings or become reluctant landlords. Some capitulation is now showing up, and competition in the existing market is rising. In the Northeast and Midwest, few people are listing, demand exceeds supply, and prices are still rising. In the Sunbelt, prices are under pressure because inventory and listings have grown. Ivy says the flat housing market will be entering its sixth year in 2027, and she expects listings loosening to pressure prices in parts of the country.
“Flip that to the Sunbelt where home prices have been under pressure, there's too much inventory and listings have been increasing.”at 17:11
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Builders have hit limits on mortgage rate buydowns; lower rates would cut buydown costs and improve margins.
Since 2022 builders have used mortgage rate buydowns, for example down to 4.99% on 30-year loans, at a meaningful margin cost. Falling rates mean smaller buydowns and incremental margin improvement. Buydowns have still helped cushion sales. But qualification problems remain: down payments are a hurdle, and back-end debt-to-income ratios on cars, cards and houses are above 50% of income. Builders are now turning to base price cuts, more options and closing-cost help.
“the rate buy downs have definitely helped and cushioned what would be much softer sales, in our opinion... But builders have finally hit a wall even with buy downs”at 19:08
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Manufactured housing is gaining share from for-sale homes, but its 30-35% valuation premium and margin pressure temper enthusiasm.
Manufactured housing has been under some pressure but is gaining share because it is growing faster than the traditional for-sale market. The 21st Century housing act and potential regulatory and zoning changes could be tailwinds. But manufacturers trade at a 30-35% premium to the market, and they still face tariff and input-cost margin pressure. Their customers are squeezed by inflation, so the sector is not going gangbusters.
“we've been seeing manufactured housing, although under somewhat pressure, some pressure gaining market share because it's growing faster than for sale in the traditional market.”at 21:11
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Getting more favorable on multifamily REITs; rents are still falling but the rate of decline is improving.
Multifamily has had more demand, and the rate of change in rents has been improving from very depressed levels, mostly in the Sunbelt. In Austin, for example, new move-in rents are still negative but less negative. REIT transaction markets have been dead, and absolute REIT performance is still under pressure. But relative performance is improving on the margin, so Ivy is getting more favorable on multifamily REITs. She is already favorable on single-family rental.
“So I'd say getting more favorable towards multifamily REITs and already favorable on SFR.”at 23:24
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Long-end yields likely rally despite deficit concerns if an AI-driven slowdown turns into a recession.
Ivy says the market is finally recognizing the deficit and debt problem, and the bond market is signaling that. But if the economy slows as the AI trade unwinds, that growth concern outweighs deficit worries and rates will rally. The rally would come even with heavy federal debt, which Ivy puts at about $42 trillion, as a risk-off response.
“And if the economy is weakening, I think that trumps the concern over the deficit and rates will rally.”at 24:38
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
A recession from an AI-led market unwind would keep housing depressed even as rates fall.
Ivy argues that if the AI trade keeps unwinding, the economy slows and wealth effects hit households. Recession 'trumps everything' in her world. Even with lower interest rates, housing would stay depressed if people are losing jobs, so housing is not investable in a recession even if rates fall.
“So everything in our world recession trumps everything. So if interest rates are going down but we have a recession, you still can't be involved in housing.”at 24:42
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
AI trade looks euphoric and unsustainable; Ivy has sold her AI exposure and expects a break.
Ivy sees parallels to pre-GFC euphoria, where people assumed no downside. She has taken her money off the table on AI exposure, mostly in private companies and startups. She thinks the AI trade has been predicated on expected usage and benefits that most industry participants aren't seeing yet. Those participants are actually pulling back on AI spending, so she feels the trade is wobbly and would be on the sidelines. She also thinks a stock market crash and the AI trade unwinding would squeeze household wealth and hurt housing. The horizon is inferred from 'something's going to break here' and is not explicitly stated.
“personally I've taken my money off the table on any AI exposure I've had, mostly in the private sector or that, you know, startups that I've been exposed to. But, you know, it just feels like something's going to break here. It's just not sustainable.”at 27:44
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Enterprise AI adoption & AI software
AI deployment in homebuilding is baby steps; builders are cutting spending until the market improves.
Manufacturers, distributors and builders are all working out where to deploy AI. The mortgage industry has had the most success. Other examples are a robotics startup that scans job sites and AI tools that notify trades when it's their turn. Ivy calls these little things with nothing significant yet. Builders are under pressure and won't spend on AI right now, so adoption should pick up only if the market gets healthier.
“I'd say it's just baby steps and I think companies are treading carefully.”at 31:19
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Market sentiment, positioning & volatility
Homebuilder rally was mostly short covering, with short interest at record highs.
Short interest in homebuilders had never been higher, and short sellers were heavily positioned. The housing sector trades more on sentiment than on fundamentals. Ivy thinks most of the post-midterm rally was short covering. The sector was ripe for a move higher, even if only short-term. Building product companies that cut guidance still rose 8-10%, which shows the market looking past the current quarter.
“I think the majority of the rally was short covering personally.”at 32:28
On The Tape with Danny Moses: Ivy Zelman: The Queen of Housing Still Reigns ·
Housing has weakened further since rates spiked; her September builder survey was among the weakest on KPIs.
Since mortgage rates spiked above 7%, housing has taken another leg down. Her September survey of homebuilders showed among the weakest rate-of-change on KPIs, and the weakness has continued into October. It has spread beyond entry-level buyers to luxury and second-time move-up markets, which had previously been healthy but are now also feeling pressure from consumer confidence hit by geopolitical events.
“we really have seen since rates spiked another leg down. So our September survey for the homebuilders was probably amongst, if not the weakest, from a rate of change on KPIs”at 2:10
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Mortgage rate buydowns, used on about 80% of new homes, now cost too much to sustain builder margins.
Public builders, about 53% of new home sales, have offset high rates with mortgage rate buydowns, and roughly 80% of new homes sold use one. Buydowns are expensive: buying down 250 basis points costs nearly 900 basis points of gross margin. Builders previously offered up to 12% incentives to sell at a 4.99% rate. Buying down to a 5.5% rate is now too costly for most, which keeps entry-level buyers from qualifying.
“So buydowns are expensive, though. So if you want to buy a rate down two fifty basis points, that's going to be nearly 900 basis point negative impact to gross margin.”at 4:28
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Deaths will exceed births by 2030, so housing demand fades and the US is not truly short of housing.
Birth rates are below replacement and the population is shrinking, while deaths are rising in absolute terms. Immigration has been halted, which slows incremental household formation. Together these reduce future housing need. Zelman's view is that the US is not in a shortage and is in a fairly balanced market at roughly 1.4 million starts. By 2030 deaths will exceed births, and the industry is not prepared for the lower need for supply that follows.
“More people in this country will die than are born, and we will start to see a lot less need for housing supply as we enter the new decade.”at 8:04
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Land sellers and land bankers must capitulate on prices as builders cut starts; land prices have been sticky.
Land prices have been sticky, decelerating but not falling year over year, and the latest land development survey shows only a modest tick lower in finished lot prices. Builders are pulling back: the September survey showed single-family starts down 7% year over year. With demand weakening, land sellers will have to cut prices, though their margins are thin because roughly half their costs are hard costs and diesel prices have doubled. She expects collaboration, since idle land is costly in downturns.
“But I think the land sellers, land bankers are going to have to capitulate, given the weakness that they're seeing on the end demand from their builders that are now going to pull back on starts.”at 8:42
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Private equity land-banking investors will likely have to accept returns lower than they were promised.
Public builders have moved to a land-light model, so private equity firms now supply the capital for land banking, roughly $35 billion in this market. Land prices are sticky and builders are pulling back on starts. Zelman expects land banking investors to come to grips with returns below what was promised unless something changes, and she cannot identify what would stop that.
“And they're probably going to have to come to grips with their returns are going be lower than they were promised.”at 11:45
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Renter households are growing faster than owners fall, and oversupplied Sunbelt rents are now affordable.
Renter households are growing faster than owner households are shrinking, and incremental renter households are accelerating. Supply built up across the Southwest and Southeast has pushed rents down, so rent-to-income has become very affordable. This is the one area she sees green shoots across an ecosystem that is otherwise hurting.
“the renter households are growing faster than owner households are going down, and incremental renter households are accelerating.”at 12:01
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Young adults living at home (now about 22%) cut household formation, and the share will not fall below 20% again.
The share of 20-39 year olds living at home rose from about 15% in the 1980s and 1990s to about 22% now. Each 100 basis point increase in that share removes about half a million households from formation. The share fell toward 20% during COVID but reversed when rates rose. Zelman does not expect it to go below 20% again, because affordability and changed mindsets both keep young adults at home and delay homeownership.
“for every 100 basis point increase in young adults living at home, that takes away half a million households.”at 13:48
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
She expects higher-for-longer rates, with long rates at or slightly above current levels in 2027-28.
Zelman does not try to forecast rates herself, but she personally believes rates will stay higher for longer. Zelman's modeling uses blue-chip consensus and the forward yield curve, which implies rates at current levels or slightly higher in 2027 and 2028. That is the assumption behind the housing outlook, so the slow recovery depends on it.
“we use the forward yield curve. We're not smart enough, Maggie, you know, forecast rates me personally, I think we're higher for longer.”at 17:15
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Affordability improves only if home prices fall, rates fall or incomes rise, and the recovery will be a slow grind.
Affordability can improve only through three variables: home prices falling, mortgage rates falling, or incomes accelerating. Wage growth is currently outpacing national home price growth, which helps, though this does not hold in every local market. Land price resets would also lower builder costs but would be slow. Zelman expects a very slow grind. Many households have not saved enough to buy, which adds to the affordability challenge.
“So it really could be a slow grind because we are seeing wage growth exceeding currently home prices on a national basis.”at 17:55
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
The economy is K-shaped: AI-linked firms do well while housing and most other industries are under pressure.
Economic discussion has moved from rich versus poor to AI versus everyone else. Companies outside the largest AI and tech names, and outside frontier labs, are in industries under tremendous pressure. Zelman says housing is among the worst of these, so the economic split is across many industries, not one.
“Now we have the AI and everyone else. Like, if you're not at the Big Seven or Meta or whatever these firms and you're not at Anthropic, you're in industries that are under tremendous pressure.”at 18:45
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
Labor and material costs are rising for builders as ICE raids hit job sites, and they cannot pass costs on.
Since late summer builders have been hearing more reports of ICE raids and job sites being disrupted. Labor had been plentiful because the industry was so weak, but that is changing. Input costs, including materials and transportation, have also been rising, and builders have not been able to pass them along. Zelman says labor and material costs are both now going the wrong way for builders.
“And labor, with the industry being so weak, was pretty plentiful. So starting late summer, we started hearing noise of more ICE raids and more job sites being impacted.”at 19:28
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
LennarBullish
Lennar is a value opportunity for investors with a much longer horizon despite the housing downturn.
Zelman says there is value in Lennar if an investor can take a much longer horizon. Housing is weak, and her own price targets are typically 12-month, so she notes that different investors use different strategies. The value case rests on a multi-year view rather than near-term recovery, which fits the value-investing approach she describes.
“And right now there is value in Lennar if you can take a much longer horizon.”at 20:22
Wealthion: Housing Weakness is spreading to luxury buyers | Ivy Zelman ·
4 older views from Ivy Zelman are on the episode pages, and all of them are a question away in your AI with Chorus.
Shows
- On The Tape with Danny Moses · 1 episode
- Wealthion · 1 episode
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