**Walker Webcast Q2 Recap: Peter Linneman and Willy Walker Dive Deep into Housing, Inflation, and Economic Trends**
Willy Walker, Chairman and CEO of Walker & Dunlop, and economist Peter Linneman of Linneman Associates reunited for their quarterly conversation in the latest Walker Webcast on July 7. As always, their discussion covered a broad range of pressing economic topics, but the focus this time was clear: housing, inflation—and more housing.
**Understanding Rent and Inflation**
A key topic was the role of housing costs in inflation measurements. Walker and Linneman explored how inflation numbers are impacted by the calculation of owner-equivalent rent (OER) and actual residential rents. According to official statistics, rents appeared to increase by 8% across the U.S. between August 2024 and May 2025.
“Anyone who owns apartments and was able to get 8% increases in rent should call me,” Walker remarked, referencing Linneman’s commentary in his recent newsletter. “My phone has been silent,” Linneman replied, suggesting the disconnect between lived reality and reported data.
**Federal Reserve Rate Cuts**
During the Q2 2024 Walker Webcast, Linneman predicted that the Federal Reserve would cut the Effective Federal Funds Rate (EFFR) three times by the end of 2024—a prediction that proved correct. For the end of 2025, he forecasts an additional 100-basis-point reduction.
“Everyone thinks I’m crazy at this point,” Linneman said. “They thought I was crazy last year, too.”
**Construction Trends and Multifamily Market**
Walker and Linneman also examined how rate cuts have driven construction activity, especially within the multifamily sector. They cited data from RealPage showing an absorption of nearly 800,000 units in comparison to a delivery of 535,805 units. While demand is strong, the cost of materials remains a concern.
Lumber prices have decreased, but other materials such as gypsum and cement are at record highs. Linneman attributed rising cement costs to a mix of global trade issues and increased domestic demand due to infrastructure projects under the “Build Back America” initiative. The U.S. imports around 22% of its cement from Canada and Mexico, and supply chain challenges have impacted pricing.
In total, building material costs are approximately 1% above the general inflation rate, with added complications from labor expenses.
**Housing Affordability and Policy Challenges**
One of the most pressing issues discussed was the lack of affordable housing. Linneman pointed to a past proposal under the Trump administration to use federal land for affordable housing projects. The intention was to bypass local entitlement processes, but he warned that any effort at the federal level would likely end up in litigation.
Meanwhile, housing underproduction and NIMBYism continue to prevent adequate supply, pushing families to remain longer in single-family rentals and multifamily units. Walker called out the disparity between public statements and action when it comes to affordable housing policies.
He highlighted the contrast between Houston and Los Angeles. Houston has improved homelessness rates significantly through relaxed zoning and support for affordable housing. Los Angeles, on the other hand, struggles due to land entitlement hurdles.
“Houston’s greatest asset, without a doubt, is affordable housing,” Linneman noted. “All you have to do is copy their playbook.”
**Replay and Subscription Information**
Replays of the July 7 Walker Webcast are available on demand through Walker Webcast’s YouTube, Spotify, and Apple channels. Weekly episodes feature in-depth conversations on the latest in commercial real estate and economic policy.
For future episodes, including invitations, replays, and insights, audiences are encouraged to subscribe to the Walker Webcast series.
