Dave:
How will AI impact the economy? And what does it mean for investors in 2026? It’s a massive question that may define the next few years and beyond, and today we’re diving deep. Hey everyone. I’m Dave Meyer, housing market analyst and head of real estate investing at BiggerPockets. My guest today is Ben Miller, the CEO of Fundrise. Ben is a thought leader in the real estate and finance space, and he has a long track record of finding value and making deals work in many different investing markets. We had him on last December when he came onto the show and presented a case for real estate investing in 2025 that mostly proved correct. But since the market is always changing and we face a lot of uncertainty heading into next year, I had to bring Ben back on to share his expectations for the economy next year and how he recommends real estate investors take advantage.
We talk a lot about AI and its potential impact on different parts of the economy and the housing market, including how you can leverage new tools in your own analysis and investing. Ben, welcome back to the show.

Ben:
Yeah, thanks for having me.

Dave:
I am always looking forward to these conversations. You are exposed to a lot. You see a lot of different stuff in real estate and in the economy, and you always have a very unique perspective on where things are going. So maybe we can start there and have you tell us just what’s your read on real estate and the housing market right now?

Ben:
Yeah. I think real estate’s bottomed, but I’ve been humbled by the last half decade. We had COVID, we had interest rates, so I’m much more humbled than I was before. There are three or four really big things happening in the world today. Obviously AI, interest rates. The political environment affects the business environment a lot these days. And then I mean, the good news is that supply is going away. New supply of construction has really fallen off a cliff. So those are part of the big four things driving real estate these days.

Dave:
All right, great. Well, let’s dig into each one of them one at a time. But before we do, when you say real estate has bottom, do you mean that for multifamily specifically?

Ben:
Well, I guess all real estate is interest rate sensitive. And I think interest rates are approximately, this is my point of view, obviously it’s impossible to know. But yeah, I think interest rates are going to keep falling. The market doesn’t believe that. The market doesn’t know. There’s a lot of debate about that. And I think so that would affect all real estate, including single family housing.

Dave:
So you think the federal funds rate will keep falling, is that right? But you also think mortgage rates will fall as well?

Ben:
Yeah, I think everything will fall. I could walk you through my argument. So let’s just set the stage. So the stage is they cut rates 375 to four. The Federal Reserve doesn’t want to cut anymore because they really don’t know. Inflation has been stuck at about 3% for the last 18 to 24 months. And the long end of the curve, the 10 year treasury has also pretty much been stuck at the low force. And so what you’re seeing is essentially a lot of uncertainty about the future interest rates. Some people arguing that we’re going to see a reacceleration in the economy, and then some people are arguing it’s going to soften. And so the reacceleration in the economy would happen for two main reasons. One is that the great beautiful bill, that big bill is going to start hitting the economy around April. And so a lot of those tax incentives will hit in 26.
And there’s an argument that companies will start spending and hiring as they get all these tax incentives from the bill. That’s one acceleration argument. The other one is obviously AI and data center build. Those are the two main arguments for why the economy reaccelerate. I’m skeptical on both. I think that the economy is not doing great outside of AI, outside data centers,
And that most companies, most people, if you get a big windfall from your taxes, are you going to spend it on hiring people or are you going to basically sock it away a little worried about the state of the economy?

Speaker 3:
Yeah.

Ben:
I personally think most people aren’t in a risk appetite mood.

Dave:
It’s risk off. Most people are risk off right now and wait and see. And although a tax boon might help some people start hiring, I don’t think it fundamentally changes the outlook in a way where people are going to feel confident about making large investments. I think that on a business level and actually on an individual level as well, just like average consumers.

Ben:
Totally. So that’s my view as well. And I say a year ago when I passed that bill, they didn’t realize that sentiment would be so much more negative. And so maybe it would’ve worked a year ago, but I think it’s not going to reaccelerate the economy in any material sense. April’s a while away, things could change. So it’s possible, but that’s not my expectation. It doesn’t seem to be yours either. The other one is AI. AI data center, really AI data center spend is the biggest CapEx or biggest dollars moving the economy. It’s absolutely insane.

Dave:
It’s wild.

Ben:
I think it’s real. I think that it’s not a bubble

Dave:
Right now

Ben:
And that the amount of money, I mean, it’s definitely going to keep the economy propped up, but it’s such a narrow part of the economy that I don’t think it’s enough to reaccelerate inflation outside of transformers, electrical equipment. Things that you need for data centers are going to be really inflated. But there’s like limited spillover effects the way that you have spillover effects on housing, huge spillover effects in housing construction.
If we were spending a trillion dollars more on housing construction, we’d see massive spillover effects, but I just don’t think that’s true for AI. So what would cause things to get slower? I think that you have sort of two main things. One is that generally things outside of AI are not that strong, not that hot. I mean, it’s like high interest rates really did slow down the economy. Home builders are as strained as they’ve been in more than a decade. Inventories are high. Multifamily construction’s off a cliff. All real estate’s pretty depressed outside of AI. Wage growth is not really strong. Hiring is not very strong. So generally the economy is pretty soft. And then on top of that, I mean, everybody knows this, but it’s one of those things that people forget. So the tariffs were put in place in April. Companies did raise prices.
They raised prices April, May, June, July, August. And so we saw inflation stay high for longer because of tariffs. But I think we’ll start to see, hey, actually, there really isn’t any more inflation in the economy. I think the inflation is gone. I think it’s just not a driver of the economy anymore. And then people will realize, oh my God, interest rates are too high.
Inflation is not 3%. It’s actually 2% or low twos. And then I think everybody’s going to wake up to that and that’s just going to cause interest rate sensitive things to get really, really, really valuable.

Dave:
I see. So my opinion is that mortgage rates wouldn’t change very much in 2026 because I think until we get a line of sight of what’s the bigger risk inflation or recession, bond yields are kind of locked up and people are kind of locked up. And so it sounds like you think we’ll get that line of sight sometime in 2026 and your feeling is that inflation will be, maybe we don’t get back down to 2%, but people will see the path down to 2% and that we’ll feel more confident that the risks, whether it’s tariffs or some other risk that could create inflation, will be mitigated. And then for reasons, bond yields start to come down, spreads start to come down, we start to see better buying conditions and a lot more activity in real estate.

Ben:
Yes, completely. That’s exactly what I think. And then I think if you were to play that out, I think there’s like two main questions. One, the market’s forward-looking. So it’s possible we start seeing that sooner than October or November or something. It’s probably really, really like 100% by November or December, but the market probably starts to get anticipatory signals earlier than that. And then everybody, at this point, you always end up conditioned by recent events. So everybody got conditioned by inflation, high inflation. And it’s like usually what happens is because everybody’s conditioned for it, it’s the least likely thing to happen.

Dave:
That’s interesting.

Ben:
The thing we’re defending against, that’s my view. And then I think the question’s going to be, what happens after that?

Speaker 3:
Well,

Ben:
What then? Now I’m going to take a really big leap. I think it goes through 2%. Really? Why? I’m curious. Because AI is deflationary.

Dave:
Yeah. Yeah. So please expand.

Ben:
Yeah. Okay. So let me do Fundrise. So Fundrise, we’re 200 people. We have a lot of different departments. Customer service, we get 6,000 tickets a month. Half of them are handled by AI.

Dave:
Wow.

Ben:
Maybe more. We used to have twice as many investor relations people handling tickets as we do now. We have cybersecurity, IT. We used to have eight people, now we have five. We used to have three people doing copywriting. Now we have none. I mean, just go down the list. Everywhere that AI touches, it either suppresses the number of jobs hiring or it gets rid of jobs. And then that will suppress wage growth.

Dave:
Yes, I agree with that. I was actually just debating this with someone on the market, our other podcast earlier that I thought real wage growth was going to go negative next year. I just think that trend is going to continue. So basically people are going to lose their negotiating leverage in labor negotiations, and so wages are going to go down.

Ben:
Yeah. We can debate, and I think it’s really hard to know exactly if it goes negative or exactly what happens, because certain people benefit and certain people will get punished. But overall, you’re replacing people with software and that’s deflationary on wages. So you have this thing where people became more expensive and goods became cheaper.

Dave:
Yeah. Or services basically. If you think about it. Service. Yeah. So services are more expensive.

Ben:
Exactly. And so AI is the first technology that really makes services cheaper. Interesting. It’s going to make people cheaper.

Dave:
So that’s the argument for lower wage growth in general.

Ben:
You basically have majority of people with lower wages and then a minority of people with higher wages because if Dave had 10 employees in LES five, is Dave making more money? Maybe because he has a lot more profit. So the average may not be lower, but the median will be lower.

Dave:
Okay. All right, everyone. We got to take a quick break, but we’ll be back with Ben Miller right after this. This week’s bigger news is brought to you by the Fundrise Flagship Fund. Invest in private market real estate with the Fundrise Flagship Fund. Check out fundrise.com/pockets to learn more. Welcome back to the BiggerPockets Podcast. I’m here with CEO of Fundrise, Ben Miller. Let’s jump back in. That’s a scary proposition, to be honest when I think about it, just like society-wise. To me, the idea that we’ll have fewer people employed and at lower wages is a big break in the economic system, is it not?

Ben:
I think that there’s a transitionary period that could be quite ugly. And I’ve actually sat down and done a lot of work on this. You can go on ChatGPT, go on Claude and ask these questions of like, okay, what percentage of their work can be replaced by GPT-5, GPT-6, go through the tasks they do. And you can really quickly get to a pretty confident conclusion that it’s not less than 10% of most people’s work. And in some places where you’ve built a customized application like for customer service or customized accounting software for AI, it can do more than 50%, I think. Let’s say 50%, maybe 90% in scheme cases. And so you say, okay, let’s just say it’s 20%. Well, 20%, 100 million is 20 million people. It’s a lot. It’s a lot. It’s huge. It’s too

Dave:
Many. Yeah.

Ben:
And it doesn’t actually cause unemployment to go through the roof. Maybe unemployment goes to 5.5% or 6%. Is it mostly it suppresses hiring? Well,

Dave:
That’s kind of what’s going on right now, right? Yes. We’re not seeing layoffs. We’re just seeing no one hiring.

Ben:
Yeah. I think that a generation of people who are in their early 20s are going to really get impacted.

Dave:
Yeah. I mean, you look at unemployment for 16 to 24 year olds right now, it’s already 10%. That’s really high. And it’s hard to imagine that picking up anytime soon. That’s what I mean about the societal challenges here. There’s obviously benefits to it, but there’s a lot of stuff that just feels uncertain. Another reason why, going back to your previous point about people not wanting to make a lot of investments, it just feels like so uncertain about these things, how these things are going to play out. We’ve had ChatGPT for what two or three years now, but it’s still so brand new. There’s going to be so many different forms of AI that start to come in, not just in large language models that could do totally different things. So I buy the idea that this could be deflationary, at least in the short to medium term.
And I can’t really think in my head of precedent for that in the economy where it’s been a sustained deflationary period. We’ve had lagging wage growth for 40 years in this country, but this seems more serious than that.

Ben:
Yeah, I guess I’d argue the opposite of that. You’ve probably seen this graph, but corporate profits have been going up for 25 years. And if you look at the number of people it takes to produce something, it’s been falling. It used to take eight people per corporate dollar and now it takes two and it’s falling to one. So technology has been making the economy more productive, need less workers, and it’s been mostly gains to capital,

Dave:
Not

Ben:
Gains to labor. That’s

Dave:
Right.

Ben:
So I think this is very consistent with that. That’s

Dave:
A good point. So there is precedent. Yeah.

Ben:
Yeah. I think it’s more similar, but more extreme.

Dave:
It’s just more dramatic. Yeah. It’s just basically the acceleration of a pattern we’ve seen.

Ben:
Right. And it’s a pattern that is both very productive and very counterproductive, counterproductive politically, productively from a capital point of view. I’m not as bearish. I think that an optimistic view would be that AI is really designed for the young people. They’re much more adaptive. So it could be that at some point, all these young peoples are getting hired to really be the person in the office who understands how to use AI.

Dave:
I’m following you. I mean, obviously no one really knows, but I think this is very plausible. This is a very plausible line of thinking here. To continue sort of your thesis here about real estate in general, how do you think this impacts, like you’re saying deflationary, that could lead to lower mortgage rates. I totally buy that if it is deflationary. So then is this kind of where the thesis about real estate bottoming comes from is like, we’re going to get cheaper cost of borrowing and asset prices are going to go back up?

Ben:
That’s my expectation, my belief that basically we end up in a new era and this era is different. We go through these paradigms. You and I have been through, I don’t know how many now, three or four. So we’re going into a new one and that new one, it’s not like the old one. COVID almost accelerated it or something. We went through usually about a decade and this one ended up being five years or something instead of being 10. And so the old one was money printing, inflation, high rates, and now we’re going to go into something that’s like high productivity growth, high returns to capital, lower inflation, but higher real interest rates. Because what happens is we have really high GDP growth and high growth that drives the real interest rate up, but it drives the inflation rate down. So it’s a little bit of a, you get some and you lose some, but generally that’s good for growth in which real estate is a levered investment in growth.
And so the leverage part gets cheaper and you get more growth. And so I think you’re just going to see a lot of benefits and then it’s going to be more asymmetric. I think that high end does better than low end real estate. So San Francisco, New York, places that selling to a multimillionaire, the high end is absolutely crazy how much money is going to be created for top 0.1% of the country.
So high end real estate, I think is where you want to be. Interesting. I’ve spent 20 years focusing on workforce real estate, real estate for middle class because usually middle class real estate is more resilient. This is where I don’t have my thinking as refined, but I think that could be impacted by this hollowing out dynamic.

Dave:
I haven’t thought about it that way. I buy the idea, if you’re right, that we’ll have a lot of wealth creation at the top. That’s certainly a continuation of a trend that’s existed in the US for a while now. I guess I’ve made my own investing thesis more about affordability and trying to find places similar to what you’re saying about workforce housing. Trying to find places where the average person can afford the average price home is your move away from that thinking that affordability for the average American could get even worse than it is right now?

Ben:
That’s the political dynamic that’s really quite ugly. There’s affordability in terms of goods and services and there’s affordability in terms of assets.

Dave:
Sure. Yes.

Ben:
I think assets get more expensive, but goods and services get cheaper. So it’s harder to buy a house, but you can afford the healthcare, maybe it gets cheaper for the first time, not in the short term, but really like healthcare is, I think, very impacted by AI. And so that’s why I was saying if you’re going to buy assets, which is real estate, you want to be in assets that benefit from the wealth effect. And we haven’t shifted our real estate strategy yet around this. It’s still early, early days on this, but high end San Francisco for sure, no question. High end New York, you probably want to be in the suburbs. I think it’s like a challenge for where you want to invest. You really have to think about that. So you want to be near these big economic centers, but not actually probably in them.

Dave:
I’m curious, this is kind of another tangent, but how does the average person afford rent in this scenario? Asset prices are going up. People are making less and less money. I see a lot of people talking about universal basic income. Is that kind of the avenue you go down?

Ben:
I don’t think so. Have you heard this thing? It’s a new concept to me. I heard it recently. It’s as opposed to redistribution, you have pre-distribution.

Dave:
No, I have not heard of that.

Ben:
It’s actually comes from the right, but it’s an argument from, we’re in CAS from New Compass. The argument is people don’t want handouts. They want a job and they want a purpose. And so we’d rather do it is effect. So like unions are pre-distribution, minimum wage pre-distribution, things that are before you get to the government. So you’ve affect the workplace. So rent control is kind of a pre-distribution thing.

Speaker 3:
Anyways,

Ben:
I think it’s going to be really popular. And so I think that there’ll be this new movement around how you address this inequality. Rent control is obviously an example of that. And I mean, it’s pretty crazy in some places where you can’t evict people and you can’t raise rents. And probably a million units in New York will go bankrupt because essentially their costs went up, their mortgage went up, their insurance went up, everything went up, but their rents didn’t go up. So all these affordable housing projects in San Francisco and DC and New York are going bankrupt. So it’s like, that’s a taking. That’s a way of redistributing wealth from the owner to the renter. So that’s a version that’s already happening. So what’s the next version of that? I think it’s hard. I think maybe Europe, you can’t fire people. Maybe they start making it so you can’t fire.
Maybe unemployment insurance becomes 10 times more expensive, so you have to support people. So there’s all sorts of possibilities, but I think it’s like in a world where you have an extreme effect on AI, I think you see extreme government intervention into the private economy.

Dave:
Yeah. I mean, something would have to happen if this scenario … I just don’t think you can have a functioning society where people continue to make less and less and unemployment goes up and up and all the money’s going to a very small percentage of people. That’s just the recipe for civil unrest if you look at history. So something would have to happen. Yeah.

Ben:
And what you’d hope is that somebody has a good idea.

Dave:
Yes, I would definitely hope that.

Ben:
Well, mostly I’m giving you bad ideas.

Dave:
But this is not your job. You’re not a policy maker. So I understand. I’m just curious if you had any, if you had seen any good ideas.

Ben:
No, have I seen any good ideas? I have to think about that. But anyways, but you understand where I’m coming from. I do

Dave:
Understand what you mean. Yes.

Ben:
But I mean, the point is when people say AI is a bubble, what I hear is deflation.
I say, “Oh, so you’re going to put two, three, $4 trillion into AI.” It’s either deflationary or very deflationary. So the two versions of it is they put trillions dollars into building artificial people. It’s software that can do the work of 20 to 50% of people’s work. That’s like my base case or worse, it is a bubble, it blows up and then we have super deflation because you have built trillions of dollars of AI, data centers that are pumping out all these tokens that are replacing people’s tasks and the AI economy blew up and deflated. So I’m like, oh, it’s just a question of how deflationary it is.

Dave:
Stay with us everyone. We got to take a quick break, but we’ll be right back. Henry, it’s holiday season. What do you get a real estate investor for the holidays?

Ben:
Well, if that real estate investor is me, you can get me a 15 unit apartment building.

Dave:
Oh, does that work? Do people just send you apartment buildings?

Ben:
They are now.

Dave:
Well, I got a suggestion actually. If you are looking for a gift to get a real estate investor, buy them a ticket to the upcoming Texas Cashflow Roadshow. We’re going to be in Texas. We’re going to Austin, Houston, and Dallas from January 13th to 16th, and we’re going to be having meetups, workshops, live podcast recording. We’d love to see you all there. So if you’re thinking you got a friend in the Texas area and they’re trying to get into real estate investing, they’re trying to scale their portfolio, go to biggerpockets.com/texas and go buy them a ticket. Welcome back to the show. Let’s jump back in with Fundrise CEO, Ben Miller. All right. Well, you’ve given me a lot to think about a lot. Before we get out of here though, just curious, you’ve given us a couple hints that you think about investing near these big economic hubs, being careful about where around those hubs you choose to invest.
What about different asset classes? Do you think residential versus multifamily or commercial will perform differently in the coming years?

Ben:
Well, I definitely don’t touch office.

Dave:
Yes. Me neither, thankfully.

Ben:
Yeah. I mean, it’s obvious because I’m talking about eliminating jobs, which eliminates office and office was already bad. No, I mean, I’m a big believer in industrial and in multifamily. I think you’re high-end for sale housing and then also rental housing in places that are not going to be overregulated. And then we don’t do high-end, super high-end residential, maybe people are even high-end retail where it sort of caters to that upper class. It’s not something I think I want to do, but I think that the asset classes around Greenwich and Susalito and places that are extreme wealth would just get even crazier. And then I mean, I’d be remiss not to talk about our AI product that we’ve been building.

Dave:
Yeah, let’s do it because I mean, we talked a lot about AI. So tell me how you and Fundrise are using AI in your own investing.

Ben:
Yeah. So we, for the last couple years, been building a real estate AI product called RealAI. It’s not realai.com. It’s still kind of in beta, but you can go in there and it’s pretty amazing.

Dave:
I’ve got to use it. It’s really cool.

Ben:
It’s amazing to me because it makes me understand the potential of AI in a different way.

Dave:
Yeah. It makes me glad that I’m a podcaster now and no longer a data analyst. Yeah. I

Ben:
Mean, it turns ordinary people into advanced data scientists.

Dave:
Yeah, it does. It’s crazy.

Ben:
We built real estate, one called real estate AI, and that’s basically to help you do analysis. We’re building more things so you can … If you take like a, “Oh, I have an OM from a broker, maybe I have a T12, I have some information, I upload the deal and I start using it to interrogate the deal. Do you think these rents are realistic? What if tariffs get removed? And what if you can do all this thinking, all this analysis with this tools and then have it produce draft for you that you can then edit.” It both saves you a lot of time, but it makes you so much smarter. I mean, so much smarter. It

Dave:
Really does. Yeah. I find myself doing the same amount of thinking that I used to. I don’t feel like I’m necessarily spending less time working, but it’s like I just get better information to consider so much faster. And ideas are introduced that I would’ve taken me a longer time to come to. Or just like, I’m an analyst. So sometimes AI will suggest a data set I didn’t even know existed. And that means that I can now start thinking about something else or there’s just framing it somewhere in a way I wouldn’t think of it. I still find myself working, of course, but it’s just a much more robust and rich set of information that I can work with. At least that’s how I’m using it right now.

Ben:
That’s a funny way to think about it because I was on a podcast three years ago and I was on again this week and they said, “Three years ago you recommended a bunch of podcasts. What do you recommend now?” And I was like, “I think I spent all my time now in AI where I used to spend it on listening to podcasts.”

Dave:
Yeah, listen to podcasts, right? Yeah.

Ben:
Because I just spend so much time essentially, it’s a form of content where I’m like, “What about this? What about that? ” And I’m thinking about things and it’s producing things for me. And so I want to ask you, because you’ve played around

Dave:
With real AI,

Ben:
What do you have to say about it?

Dave:
I love it. I’m being sincere that someone like me who analyzed housing markets, don’t go into that career right now. Aggregating real estate data is a huge pain in the butt. And we don’t need to get into why, but it’s really disparate. There’s MLSs, there’s data source, there’s private sources, there’s public sources, there are county and national. It’s a lot of stuff. And what Ben and his team has done and allowed us to access all this information about a city, dig into comps, dig into migration patterns, dig into ARVs, all of it in one place, it’s incredible. This is a true time saver. I felt like I could do this analysis before, but I was probably one of few people who could do it confidently. But now not only can anyone do it, but you could do it in a fraction of the time. It even took me to do it.
And so I think it’s going to be an interesting thing, but I can even feel myself feeling a little overwhelmed by it almost, where if you’re not an analyst digesting just tons of data might be a little bit intimidating. But for people like me who are analytical, it’s a playground. It’s super, super fun. And I’m sure what you and everyone else is working on is just like, how do you make this different levels? How do you create a level for a beginner investor to understand things and then a little bit more sophisticated, more sophisticated and have different levels of communication. But the fact that it’s all there is just fascinating. I am guessing, because I get messages from our audience all the time, people saying, “Where do I get data about the housing market?” And they’re not even talking about anything like what you’re doing, but it’s frustrating for regular investors even to go to Redfin than to go to the BLS and to go to the Fred website and just even get four or five data points, even if you’re not trying to aggregate them, it’s frustrating to do just that.
And so I think the merging of all this information into one digestible place is going to make the job of an investor, I think just more fun. You get to do more of the enjoyable part
And less of the admin kind of backend stuff that someone like me does at least. I think it’s going to become more fun.

Ben:
My friend, I have a friend who’s a very inappropriate person, but he says, “Wake up in the morning, I should have an omelet. There’s the insight. He go to the store, he’s got to get these eggs, he’s got to get the butter, you got to cook it. ” And finally at the end, you get to eat it. But how much of the time was not the insight, not the eating?

Dave:
Oh my God. I’ll spend an hour cooking in four minutes eating. I just inhale food. It’s embarrassing.

Ben:
That’s how I think a lot of work is a lot. I don’t think AI is going to get rid of the four minutes. I think that we’re nowhere close to AI replacing people. There’s so much of your work is just not valuable. It’s just grindy, administrative, sucky work. That’s the stuff AI is so good at.

Dave:
All right. Let’s end there because to me that is an optimistic out … I love that idea. That’s a great positive view of how AI might impact all of us on our work. Well, Ben, thank you so much for joining us. It’s always a pleasure.

Ben:
Yeah, thanks for having me.

Dave:
And thank you all so much for listening to this episode of BiggerPockets Podcast. We’ll see you all next time.