Years after investor attention shifted to commercial real estate and climate-focused technology, venture capital is returning to one of the U.S. economy’s most stubborn problems: residential real estate deals.
At Inman Connect New York last week, Fifth Wall CEO and Chief Investment Officer Brendan Wallace expressed renewed confidence in housing technology. Not because the industry has suddenly modernized, but because it hasn’t.
“Housing transactions are still an anachronism,” Wallace said. “It’s outdated, slow and painful. We’re not seeing the transparency and frictionlessness that people envisioned 10 years ago. But now there’s a convergence of AI, regulatory changes and new consumer expectations that is making the category exciting again.”
For Fifth Wall, one of the world’s largest proptech investors, the change marks a return to the formula that originally drove early bets on companies like Opendoor and Hippo. So, even though housing is the single most important consumer transaction in the United States, the infrastructure that supports it remains fragmented and inefficient.
Wallace said today’s investment wave looks different than in the past. Instead of widespread experimentation, capital is flowing to platforms that directly compress friction, especially those built from the ground up around AI.
AI native tools are meant to elevate agents, not replace them
One example is Breezy, an AI-native platform that Fifth Wall recently backed, which is designed to act as a workflow engine for agents. Unlike many CRM systems that later added AI capabilities, Breezy was designed around autonomous intelligence from day one.
“The core value proposition is using AI to make agents look special in front of clients,” Wallace says. “The agents we spoke to feel fundamentally different.”
A standout feature is Breezy’s “Underbuilt” analysis tool. This tool uses zoning data, geospatial modeling, and setback calculations to instantly determine if a property has unrealized development potential. Traditionally, this process required weeks of manual review. Breezy compresses it into seconds.
This feature reflects years of commercial real estate analysis that identifies the highest and best uses for a property, but now puts that intelligence directly into the hands of agents. As local governments increasingly adopt policies around accessory dwelling units, density changes, and infill development, Wallace believes tools like this can help real estate agents speak the language of land value, rather than just listing properties.
More broadly, Fifth Wall’s housing investment lens includes macro housing themes where technology that reduces friction and costs has significant downstream impacts.
“There’s a compelling argument that housing costs drive almost everything in the economy,” Wallace said. “One of the filters we use is whether this technology will reduce housing costs over the long term.”
Alternative models expand, but agents remain central
At the same time, Fifth Wall is supporting companies exploring parallel trading models. That includes Ridley, which is building a fixed-price automated home selling platform for sellers who prioritize cost and simplicity.
Rather than viewing these models as existential threats to agents, Wallace frames them as market expansions.
“There are more people who want to sell their homes than actually want to sell,” he says. “Timing, complexity and cost drive people away from the market. Alternative models create entry points for those sellers.”
Fixed fees and AI-driven platforms may eventually put pressure on traditional fees, but Wallace believes the short-term impact will be fragmentation rather than disruption.
“There will always be consumers who want professional representation in complex transactions,” he says. “What’s going to change is that agents who have technology in place will have a huge advantage.”
He draws parallels with other professional services that are under pressure from automation. AI tools do not eliminate expertise, but rather empower practitioners who learn to leverage it.
“We are not moving towards a world without lawyers and representation,” Wallace said. “We are moving toward a world where human experts who embrace AI will outnumber those who resist it.”
Consumer finance innovation enters ownership lifecycle
Fifth Wall is also betting on infrastructure to reshape the way consumers economically engage with housing. Bilt Rewards is widely known in multifamily housing for allowing renters to earn credit card rewards on their rent payments, but it’s now expanding to mortgage payments as well.
The logic is simple. Housing is the largest recurring expense for most households, but historically the benefits to consumers have been limited.
“Consumers move huge amounts of money through their homes every month,” Wallace said. “Rewarding that behavior creates engagement and financial flexibility.”
If mortgage-linked benefits, like Bild’s rental model, gain traction, Wallace sees potential ripple effects across the consumer finance ecosystem, from liquidity tools to payment timing solutions, potentially changing the way homeowners feel about their monthly housing costs.
The new focus on housing also follows a sharp decline in climate change-focused venture investments that Fifth Wall has aggressively pursued. Mr. Wallace said this economic contraction was one of the most sudden falls in capital he had ever seen.
“The political and cultural momentum around climate has shifted very quickly,” he says. “Many hardware-focused climate startups couldn’t survive the funding freeze.”
While Fifth Wall continues to invest selectively in energy efficiency and building technology, Wallace noted that investor attention has shifted to software-driven housing platforms with clearer short-term adoption paths.
Over the next 24 months: Increase your productivity
Looking ahead, Wallace expects AI to define the next stage of agent productivity. Tasks once considered routine (research, client communications, asset analysis) can increasingly be automated, saving time and increasing results.
“Every profession involves repeatable work,” he said. “Agents that proactively adopt these tools will have an even greater competitive advantage.”
Bifurcations between automation-leaning and automation-resistant firms can shape intermediary dynamics as well as single start-ups.
“What’s interesting is we don’t fully understand where it leads,” Wallace said. “But the most valuable skill right now is curiosity.”
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