2025’s Massive Opportunity for Real Estate Investing (Before It’s Too Late)

Real estate investing may not see an opportunity like this for years. We’re in one of the wildest economic periods: mortgage rates are high, inflation has cooled, stock prices are hitting records, and the housing supply chain is slowing dramatically. What happens next? In short, something really, really good for real estate investors. And this isn’t hype—it’s precisely what the data points to. Ben Miller, Fundrise CEO and one of our favorite macroeconomic experts, is back to break down his four data points that directly point to a win for real estate investors in 2025 and beyond. Answer this: what happens when housing supply is low, little to no new inventory is coming online, interest rates come back down, and everyone’s competing for homes? The answer: prices go up. That reality is coming to fruition soon, and those who already own real estate are poised to reap significant profits. Those who sat on the sidelines will be forced to compete with other buyers as sky-high demand returns. But that’s not even Ben’s entire argument. He brings even MORE data to make the case for real estate in 2025—and it’s a case you shouldn’t ignore. In This Episode We Cover: An expert’s case for real estate investing in 2025 and why it isn’t too late to get in Why commercial real estate could be close to the bottom (and be rebounding soon) The stock-to-real-estate correlation that BROKE last year (and what it means) The reason Ben believes new Trump tariffs could be good for homeowners and investors Why the housing undersupply problem could get even worse in 2025, 2026 What happens when interest rates fall and demand for homes returns? And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Put Your Vacation Rental on Autopilot with Hospitable Grab Dave’s New Book, “Start with Strategy” Find Investor-Friendly Lenders Redfin’s 2025 Housing Market Predictions (Home Prices, Mortgage Rates, & More) Connect with Ben Connect with Dave (00:00) Intro (01:05) The Case for Real Estate in 2025 (02:58) 1. Real Estate is Cheap(er) Now (Timestamp) (06:15) Have We Bottomed? (Timestamp) (09:02) 2. The "Inverse Correlation" Begins (15:02) 3. Housing Supply Will Crash (19:41) Tariffs Will Help (24:06) 4. Interest Rates Will Fall Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1059 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:05Dave Meyer?

  Hey everyone, welcome back to the BiggerPockets Podcast. Today, we are making the case for real estate as an investing class. Now, I like to think that this show makes the case for real estate pretty much every week, three times a week, but my guest today is Ben Miller and he has a compelling case to share as well. Ben has more than two decades of experience in real estate and finance, so I always enjoy speaking to him and hearing about his insights on where the markets are going. And today, he's going to share his theory for why real estate investing remains a great asset class for people to invest in heading into 2025. Ben has four bullet points, which we're going to discuss and debate, but I think you'll probably be like me and agree with a lot of his reasoning.

• 0:50Dave Meyer?

  And what I like so much about this is that it's a really zoomed out sort of long-term case for why it's worthwhile to build a career around real estate or build a portfolio, even if you're working full-time. So let's welcome Ben to the show. Ben Miller, welcome back to the BiggerPockets Podcast. Thanks for being here.

• 1:10Speaker 01

  Thanks for having me.

• 1:11Dave Meyer?

  So Ben, I know you have a four-part case for real estate. What's point number one?

• 1:15Speaker 01

  Well, to put it in context, real estate, that's institutional real estate, commercial real estate, private real estate, has been hit hard. The last 24 months have been a recession for the business of real estate. So that doesn't mean single-family homes, but it means like apartment buildings and industrial and if you're a broker, mortgage business, like it's a recession in real estate. And I think that's been confusing to our investors because it's not been a recession for most other markets. Stock market at all-time high and you have the business of real estate, institutional real estate, you know, recession bottoming. I've seen investors, actually, they really do chase the most recent returns.

• 1:59Speaker 01

  So crypto's been hot, that's where they go. If real estate's been hot, they go there. So they have a lot of recency bias. And so the stock market's looking really hot, people are really optimistic and real estate's looking not as attractive. And so I wanted to make the case for real estate because a lot of times what's recently been hot, it doesn't mean that's it's going to continue.

• 2:20Dave Meyer?

  Yeah, sometimes you've already, you've already missed it. If it's already hot, then you probably weren't in position to take advantage of it. And now getting in now is probably not as good an opportunity.

• 2:31Speaker 01

  Yeah, but nevertheless, people find it really hard. Like they were, if they weren't in the stock market and the last two years went up like 40, 50%, they're really feeling they're kicking themselves and they just like, they can't help, like, maybe I have to get in now. So, so, okay, so I have this sort of make the case for real estate. I have like four major points I want to make.

• 2:51Dave Meyer?

  You're doing my job for me. I love this. You're just, you organized the whole interview into four points. I want to hear them.

• 2:57Speaker 01

  Okay. So here, the first one, which is pretty simple, which I'm calling buy low, sell high.

• 3:06Dave Meyer?

  This is a new concept for me. I've never heard of this one before.

• 3:09Speaker 01

  Yeah, yeah. Well, cause if you look at the stock market, right? Uh, there's lots of measures. I was looking at this, Bank of America put out this chart last week that the market value to book ratio. So like they're saying like, okay, how, how much company worth in the stock market? How much is it worth according to their accounting, you know, their balance sheet? Is it the highest it's been ever? So just recently went higher than 2,000 stock bubble.

• 3:32Dave Meyer?

  Yikes.

• 3:32Speaker 01

  It's higher than it was in 2021. Then, so we, by some measures, the stock market is more expensive than it has been in history.

• 3:41Dave Meyer?

  Yeah. And just for our listeners, if you're not familiar with the stock market, a lot of times, the way we'll measure this in a sort of macro aggregate sense is something called like a price to earnings ratio is one way to look at this. Basically, how much is the stock worth compared to how much revenue or profit in a business creates? And to Ben's point, that ratio is extremely high. So stocks are very expensive right now. And I guess somewhat alarmingly might be more expensive than they were prior to previous corrections or crashes.

• 4:14Speaker 01

  So yeah, so the price to book according to B of A, it's a five, almost five and a half. And historically it's maybe like three price to earnings.

• 4:23Speaker 01

  Depends which ones you want to use. I like to use a Schiller, which is like 10 year average, rather than using like kind of a snapshot in time. It's, it's, that's a 38 and which is higher than 2021, but not as high as 2000. So there's different measures. The funny thing about bubbles is that bubbles typically go a lot bigger and longer than you expect. So it doesn't mean that the stock market is going to correct anytime soon. It may never correct. I'm just saying that if you are a value investor, it's expensive. The price is high. Warren Buffett, most famous value investor, right? He's, he's gone all cash. He has more cash in history, 300 billion in cash. So there are some people, but not many, who are, who are still concerned of the stock market. At this point, most people are in the pool. And so the

• 5:07Speaker 01

  stock market is high at the moment. And on the other hand, real estate is low. I mean, real estate prices have fallen since 2021, probably 20, 30, in some cases, more than 30%, 40%.

• 5:19Dave Meyer?

  That's commercial, right?

• 5:21Speaker 01

  Well, yeah, yeah. I mean, anything that's priced by an investor.

• 5:23Dave Meyer?

  So yeah, that's not like one, single family homes or two to four unit residential properties.

• 5:29Speaker 01

  So the single family housing market is different than the investor market. The investor market is priced based on like discounted cash flows or expectations of returns, interest rates. It's more mathematical. And that world has seen prices fall depending on your different assets. You know, say 20, 20 to 30%. So the rate real estate is down, let's say 20% and the stock market is up 50%. And so purely on like a value point of view, like real estate doesn't look so bad comparatively. If you're thinking about it in terms of price, not in terms of momentum. Momentum investors buy whatever's going up. Value investors buy with cheap. And so this is like more of a value investment case, which is number one.

• 6:12Dave Meyer?

  All right. I buy, buy low, sell high. I think, you know, this decline in values in commercial real estate has been around for a year or two now, and it's felt a little risky, at least to me, to get back in. But are you saying that right now, the market is stable enough to start buying back into it?

• 6:34Speaker 01

  This is the hard part because it's easy to imagine the stock market continues to tear for another year. And so you could be in it for a year and if you're really smart, and then all of a sudden it could blow up. You can imagine that it stops this tear. I mean, so it's really, I mean, it's impossible to sort of have a sense of where that is going. All you can sort of say is where it is today and where it stays priced is expensive. Real estate is a little easier to actually get your arms around because it's less complicated and there's less drivers. And the big drivers of real estate are supply, supply of new housing, supply of new rental housing and interest rates. And interest rates, they hit the peak

• 7:17Speaker 01

  at 5.5% in over the summer. They've come down 75 bips. And so it feels like interest rates are the biggest driver of real estate. And we've already hit the bottom. I've already seen some recovery. So it doesn't seem like real estate gets much worse.

• 7:31Dave Meyer?

  Yeah.

• 7:32Speaker 01

  But it may take longer to recover than most people would want. And so it may be that it's just people aren't patient enough. I wouldn't be surprised if the next year looks like the last year. And so you say, oh, it was smart to do, buy the momentum.

• 7:47Dave Meyer?

  Yeah.

• 7:47Speaker 01

  But I also wouldn't be surprised for everything to Trump, in particular as a catalyst, to where everything changes and how it changes, God knows.

• 7:57Dave Meyer?

  We don't know yet. Yeah.

• 7:58Speaker 01

  Yeah.

• 7:58Dave Meyer?

  So it sounds like what you're saying is you don't think commercial real estate will get worse, but is it the best investment next year? Unknown, because other things like the stock market could be doing well. And even though we may be somewhere close to a bottom on multifamily assets, we don't know when the upswing actually starts. Like it could be a long bottom.

• 8:21Speaker 01

  Yeah, I'll try to flesh out that in some of my other points. But I think just sort of the fundamental first point is that you can just look at the price and usually over the long-term price matters.

• 8:32Dave Meyer?

  I think so. Yeah.

• 8:33Speaker 01

  Well, it'll be in the short term where it doesn't. I mean, it doesn't. So I think that for some people who are not long-term investors, it's not a very persuasive point yet.

• 8:42Dave Meyer?

  So that's Ben's first reason he believes real estate is still a great investing class. But he's got three more points to share with us right after this break.

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• 12:52Dave Meyer?

  Thanks for sticking with us. Let's jump back into my conversation with Ben. All right. So that's point number one is basically there's good value in real estate, potential to buy low, sell high. What's the second point?

• 13:04Speaker 01

  The next point I call inverse correlation.

• 13:08Dave Meyer?

  Okay.

• 13:08Speaker 01

  And so in my career, actually, usually, real estate and stocks move together. When I started Fundrise in 2012, 2012, 2022, so that's 10 years. I mean, sometimes stock market was a little higher, sometimes real estate was a little higher, but it, they moved more or less together for 10 years. And then in 2022, September, Fed started raising interest rates. They both fell, but starting in 2023, they diverged.

• 13:35Dave Meyer?

  Yeah.

• 13:36Speaker 01

  Real estate kept going down and stock market went on a tear up. And so they, the correlation broke in 23. What's interesting about that is sort of like, if you think about it, it's like, well, what are the possibilities? Like, sort of, they continue to move in different directions, or they start to move in the same direction again. So the interesting thing is what's driving them in different directions is that high interest rates drove real estate down, but high interest rates didn't seem to affect the stock market. And that's because what matters more to the stock market is how hot the economy is. So a hot economy drives stocks more than interest rates does. But actually, real estate, especially rental real estate, not very affected by the economy. I mean, people have to have a place to live, have to rent.

• 14:22Speaker 01

  So, so the real estate is a little bit more resilient in a downturn. So if there is a recession and the economy slows, that would likely hurt the stock market. Stock market would fall and with it, interest rates, because the Fed would want to intervene to lower interest rates to stop a recession. And that would cause real estate prices to go up. And so what's happened now with the breaking correlation between real estate and, and stocks is real estate has become a hedge.

• 14:51Dave Meyer?

  Hmm, interesting.

• 14:52Speaker 01

  It started to act like a hedge on stocks where there's a version where real estate does well and stocks do well with a normal economy. But if a world where stocks are falling, real estate should actually do really well, like really see a big pop and balance out some of the losses from the stock. So it's not normally, real estate isn't normally a hedge on stocks, but in this case, I think it's become pretty clearly.

• 15:15Dave Meyer?

  Huh, I never thought about it that way. It's true, though.

• 15:17Speaker 01

  Yeah. So way it moves inversely for the moment, I think it's going to move inversely with the stock market.

• 15:22Dave Meyer?

  Interesting. Yeah, that's that. So they're inversely correlated. That was your second point. I'm curious, you know, we're talking mostly about, like you said, commercial grade assets that are valued by investors. But in 2023 or 2022, it does seem like the correlation between the residential housing market and the multifamily housing market sort of broke. You know, we still see single family home prices going up counter to what's happening in the multifamily space. What do you make of that divergence there?

• 15:56Speaker 01

  Yeah, I mean, I think at this point, it's pretty clear to people in the industry because most people, I'm talking about almost 80% of people have a fixed rate mortgage below, I think it was below 5%, but I think 65% of people have a mortgage below 3% even.

• 16:11Dave Meyer?

  Yeah, some crazy number, yeah.

• 16:14Speaker 01

  Nobody has to sell their house and nobody wants to sell their house and get an 8% mortgage or 7% mortgage.

• 16:21Dave Meyer?

  No way.

• 16:22Speaker 01

  And so the supply of new housing, supply of existing housing coming to market has dwindled to the lowest it's been. And so that lack of supply has meant that the demand has not had choice. Like, if you take a market where maybe there's 1,000 buyers in a market, there may only be 800 homes. And so it's kept prices up. And so what's driving pricing is not interest rates, but actually supply and demand. And that phenomenon, I think, is pretty stable.

• 16:50Dave Meyer?

  Yeah.

• 16:50Speaker 01

  Like, those fixed rate interests are not going to go away. And so I think the single family housing market is being priced more by consumer demand than by like the investment profile. Like, it doesn't seem like a great investment to buy a new home and pay a 7% mortgage. Like, I don't think that's like as attractive as renting, where you can rent in a much lower total cost per month.

• 17:13Dave Meyer?

  Yeah, not from a mathematical standpoint, for sure.

• 17:15Speaker 01

  Funny enough. The history of single family housing going back like 100 years is more like what we're seeing today. It used to be that single family housing was considered the safest asset in America.

• 17:26Dave Meyer?

  Yeah.

• 17:26Speaker 01

  It had never gone down. The reason why 2008 financial crisis happened is that all the fancy analysts assumed that you could never have a housing collapse.

• 17:36Dave Meyer?

  Right. Yeah.

• 17:38Speaker 01

  And so we're going back to normal. And so housing has become really safe again.

• 17:42Dave Meyer?

  I'm so glad you said that because I wrote my own, yours is sounds more organized than mine at this point. I just wrote a rant that like the residential real estate market is just returning to normal. Like, and it was still a good time to be a real estate investor in the 90s. That was a pretty normal time for real estate in the 70s. You know, like there were still strong ways to make profits as a real estate investor. But I think a lot of people, you know, in this podcast, in our community included, sort of got anchored to this idea that you could have these massive profits that were driven in the 2010s. But that's the anomaly, not what's going on right now.

• 18:21Speaker 01

  Yeah, I'll agree with you with like a caveat that like every decade had something weird happening.

• 18:26Dave Meyer?

  Sure.

• 18:27Speaker 01

  You know, the 70s had like the oil shocks and inflation. The 80s had the SNL debacle. Like then it all blew up in the 90s. Like every decade seems to have its own flavor of special opportunities and challenges. Then the housing bubble in 2010s where the housing bubble collapsed and interest rates went to zero. And so, so we're in this new one. We don't really know what it is yet. I think it's going to be, everything in the 2020s will look back as an aftershock politically, socially, economically to the pandemic.

• 18:58Dave Meyer?

  All right. So we've talked about your two principles so far. First one was that buy low, sell high. The second one is an inverse correlation between commercial real estate assets and the stock market and how real estate is emerging as a hedge against the stock market. What's the third principle?

• 19:15Speaker 01

  So the third point in my case for real estate is that housing is moving from an oversupply to an undersupply.

• 19:23Dave Meyer?

  Yes. Like the pendulum is swinging back.

• 19:26Speaker 01

  Right. So Just to sort of summarize that in 2021 and most 2022, interest rates were zero. There was like a lot of hot money. Rents were growing almost 20% a year. And so a lot of developers started new construction, everything. I mean, if they start new construction in multifamily, you probably don't see it. They saw with started it with industrial. There's just a lot of new supply that started in that boom. And it started delivering 18 to 24 months later when construction was complete. So it takes 24 months to build a big building. So they started delivering all these new buildings in 2024 mostly and some in 2025.

• 20:06Speaker 01

  And it just oversupplied the market with new construction, mostly apartments. And in some markets like Austin, it just flooded the market. And that oversupply crushed rent growth. Rent growth right nationally, I think, went to close to zero. In some markets went negative 10%, maybe even worse. And so at the same time in 2023, when interest rates had skyrocketed, supply had also skyrocketed. And it was kind of a perfect storm for real estate. That's why real estate values fell so much. There was like a poor rent growth at really expensive interests. And so that's where we were.

• 20:44Speaker 01

  But if you look forward, because start a new building, interest rate probably is 8%, 9%, maybe 10%. You're having to put up way more equity. So most people can't start a new building and they can't afford to, doesn't pencil. And so this new multifamily starts have plummeted, have fallen, I think, 65%. I think they're going to fall 80%. And so what's going to happen is by 2026, so about a year from now, there'll be no new construction. There'll be no supply to the market and we're going to go into a undersupplied market. And that's going to be great for real estate rents, great for real estate owners. And it's essentially the opposite of where we've been.

• 21:27Dave Meyer?

  Yeah, it makes so much sense to me. Multifamily construction patterns is one of the easiest things to forecast. It's actually really nice because. Like you said, we know when people file for permits and we know that it takes 24, 36 months in some certain cases. So you could actually look like in CoStar, if you have a CoStar subscription or one of these other data providers, you could just see the, the pattern is remarkable. Here it is. So if you're not watching this on YouTube, he's holding up to the camera the chart that I'm trying to describe. But it's basically just, you see all of these deliveries and then they just fall off a cliff and it's going to totally change the dynamics. And

• 22:10Dave Meyer?

  it, it's sort of somewhat inevitable because you've probably heard this said before that, you know, the total supply of housing units in the United States is undersupplied. Some people say it's 1 million. Some people say it's three. Some people say it's seven, but there's a general consensus that we need more housing units. But it can be confusing when we hear that there's an oversupply of multifamily right now amidst that backdrop of a larger housing shortage. And Ben actually said there was a flood of supply and I think it helps people understand. I actually hit someone else on the show to explain it literally as a flood. Like you can be in a drought. Just imagine like a lack of water. You can

• 22:50Dave Meyer?

  be in a drought and you can have all of this water come down and completely inundate the landscape with water. And that will be really intense and you can't even absorb all the water for a while. And then a couple of weeks later, you're still back in a drought. And that's sort of how I've been thinking about it. It's like we have this huge glut of supply, but project out a year, project out two, three, four years from now, we're still going to be in the drought. There's still going to be a excess demand for housing units in the US. And that's going to push up rents and valuations. We got to take one more break, but on the other side, we'll hear Ben's remaining points on why he still believes in real estate.

• 23:30Dave Meyer?

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• 25:38Dave Meyer?

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• 28:19Dave Meyer?

  And we're back. Here's more of me and Ben Miller.

• 28:22Speaker 01

  When we move to the fourth point, the last one's the hardest one. So we'll see. But if interest rates stay high, that means construction stays low. That's one of the reasons why I think housing or real estate has bottomed is that two things that were hurting it were interest rates and oversupply. Oversupply is going away. And if interest rates stay high, it's definitely not coming back. And then that leaves you this question of, well, are interest rates going to keep coming down? I think that's the hardest one to call. I'm going to make an argument around it, but I think it's, it's the most unpredictable.

• 28:55Dave Meyer?

  Yeah, I agree. And I think it is the most unpredictable. And you hear people making predictions all across the spectrum. Some people are saying we'll get to 5% next year for, for a 30 year fixed. I, I don't personally see that coming. I do think that they're going to stay a bit higher for longer. And to your point, I think that that will impact construction. We also are hearing from President-elect Trump that he's going to implement tariffs, which could make materials or construction more expensive. If we have a reduction in our migrant workforce, that can make labor more expensive for construction. We did a show recently, we were sort of reviewing some of the predictions for the

• 29:40Dave Meyer?

  housing market and Redfin said that they are expecting a boost in construction due to deregulation. And I'm not, I'm not sold on that.

• 29:50Speaker 01

  Have they ever built anything?

• 29:54Dave Meyer?

  Yeah, right. It's like, I get that there might be less regulation, but it's just gonna be too expensive to build. So like, I don't know if I, I buy that.

• 30:03Speaker 01

  I know what you're talking about. I've developed a lot of real estate, like, I'm gonna say millions of square feet, but a lot, a lot. And all regulations at the state and local level permits or counties and cities, federal, there's no federal regulation building anything. So I don't understand what they're talking about. But I mean, going back to your main point, and actually, it was on my, it was on my caveat, my PS, so you, I'll just do that before interest rates, tariffs. So I, I have an argument. I believe tariffs are gonna be great for real estate. People are worried about tariffs being inflationary. And I think that people have forgotten that inflation is actually can be good for real estate. Because let's just say that, that Trump passed,

• 30:43Speaker 01

  let's say 20% tariffs, round numbers. That means that every single import's 20% more expensive. And let's say that it costs 20% more to build a building, because steel and maybe labor's more expensive because we've deported people. Well, that's great.

• 30:59Dave Meyer?

  It makes the existing supply more valuable.

• 31:02Speaker 01

  Yeah, we own 20,000 real estate apartment units. Like, if it costs, let's say, $200,000 to build a unit, now it costs $240,000 to build a unit because it's 20% more expensive. That just means our apartment buildings are probably worth about 20% more.

• 31:18Dave Meyer?

  Yeah.

• 31:18Speaker 01

  So, okay, fabulous. And actually, like, I think to some extent tariffs are recessionary, like they are a tax on consumers. And that's great, too, because that means that it slows the economy down, then they can lower interest rates.

• 31:29Dave Meyer?

  Right.

• 31:30Speaker 01

  So like, real estate acts as a hedge, right? Because it's not good for stocks. Tariff's not good for stocks. But they, I think they are good for real estate.

• 31:37Dave Meyer?

  Yeah, that's an interesting point. Yeah, that, that is the, the logic that I was going with when I was sort of reviewing these predictions. I was like, it's just gonna make everything more expensive. People are not going to start building into that environment, but people who hold existing homes or existing assets are going to benefit from that. So I, I agree with you. I like your letter. Is this gonna be made public?

• 32:01Speaker 01

  We'll see. We'll see. I, I write stuff and then I circulate it internally, and then it gets torn apart.

• 32:07Dave Meyer?

  Yeah. Okay. Well, I think the broad picture I generally agree with. So it seems like you're optimistic. If I can summarize, tell me if I'm wrong. You're optimistic about real estate because it is relatively valuable, especially compared to the stock market. It is a hedge against a very hot stock market. And if there are these situations where there are tariffs or increase in construction costs and interest rates stay a bit higher, then that could only bolster values for real estate in general.

• 32:42Speaker 01

  Well, the last one is whether interest rates come down or not.

• 32:44Dave Meyer?

  Okay.

• 32:45Speaker 01

  We didn't get to that, but it's.

• 32:46Dave Meyer?

  Well, let's go. Let's let me ask you. Say more about what you what you're thinking there.

• 32:51Speaker 01

  Okay. Well, I mean, as I said, this is caveated by being the one that has the most amount of drivers in the world. So my argument is that one, that the main reason we had huge amount of inflation in 2021 was the pandemic and all the money they printed to stimulate the economy during the pandemic and the shutdowns. All of that basically messed up supply and demand and that caused prices to go through the roof. That's in the past. It's gone. And so 99% of the source of inflation is is over. That's a fact. The question is, I think, two, is will deficits drive inflation? And historically, there's actually very little

• 33:32Speaker 01

  relationship between deficits and inflation because you saw in 2010s, there were huge deficits all through the 2010s, and we didn't see any inflation. Inflation was about 2% in the first Trump administration and interest rates were at 2%. We're going into 2025 and inflation is 2.5, 2.8% and interest rates are 4.6%. So they're a lot higher. So I think there's a lot of room there for them to come down. And the last thing, which is going back to like our bread and butter, real estate, the main reason that inflation is high today, the main driver of inflation, according to the Bureau of Labor Statistics.

• 34:12Dave Meyer?

  Is real estate.

• 34:13Speaker 01

  Is is real estate rents.

• 34:14Dave Meyer?

  It's rent. Yeah.

• 34:15Speaker 01

  Yeah. Yeah. They are. They're called owner equivalent rents. And according to the BLS and, and, you know, essentially how they calculate consumer price index, CPI, is that rent growth is at 5% a year. And you and I know is at zero. So I think it's lagging by a lot that government statistics are lagging in the privacy, you know, sources of data and that when it comes in line, eventually you would actually be able to see that inflation is pretty much dead, it's gone and that'll allow the Fed to lower interest rates. And so I think that like, yes, there could be something surprising that could cause interest rates to go back up because of war or we have another

• 34:57Speaker 01

  pandemic, God knows, avian flu. But putting those aside, like I think the general direction of real estate is down. Trump wants it down. The Fed thinks worried about unemployment. And so it seems like it's a good bet. It's just like, will it get down to three and a half percent for Fed funds rate or will it get to lower? But it's not going to, I think it seems realistic, the betting money in the capital markets is that it's going to come down a decent amount and that's going to be good for real estate.

• 35:25Dave Meyer?

  Yeah. Okay. Well, I'm glad to hear you're optimistic. I, I do think the path is down. Personally, I think it's just going to take a while. I don't know if it's going to be as quick as a lot of people in the industry think. I just wonder if bond yields will stay high because the fear of inflation, right? Like if, if we start to implement tariffs or, you know, lower interest rates, like there is, I guess, some concern that inflation will reignite.

• 35:54Speaker 01

  Yeah. The financial markets always fight the last war.

• 35:57Dave Meyer?

  Yeah.

• 35:58Speaker 01

  So they were obsessed with the great financial crisis. I was now everybody's obsessed with inflation. It usually protects you from it happening.

• 36:07Dave Meyer?

  Yeah.

• 36:08Speaker 01

  And so it's probably something else. I mean, if I, if you go back and just sort of say like, it's always the stuff that people forget because it's been too long ago. And so like, the thing has been too long, has been bank deregulation.

• 36:19Dave Meyer?

  Interesting.

• 36:20Speaker 01

  You know, the 1980s Reagan deregulated the banks and they just, you know, they blew up the entire economy. So every time somebody said deregulation, I always ask like, do you mean the banks? Cause I hope you don't mean the banks.

• 36:33Dave Meyer?

  Yeah. Interesting. Yeah, that's a good point because it feels like that happened with inflation, right? It was too long since we had inflation and so people took their eye off it.

• 36:43Speaker 01

  The 1970s was inflation, 1980s was bank deregulation. So I'm like, okay, like that's what I expect.

• 36:50Dave Meyer?

  All right. Well, Ben, this has been awesome. Thank you so much. I, I, I love that you organized your thoughts about real estate so neatly. Uh, it's a really, in my opinion, compelling case for the long term of real estate. I agree with you. Like, I don't know exactly when these things start. Is it six months from now? Is it a year? But like, I do think when you look and zoom out, a lot of what you're saying makes a lot of sense. So thanks so much for sharing it with us today.

• 37:13Speaker 01

  Yeah, appreciate it. Thanks for having me.

• 37:15Dave Meyer?

  Thank you all so much for listening. We'll be back with another episode of BiggerPockets Real Estate in just a couple of days. See you then.