Business · Economy · 3 hrs ago
J.P. Morgan strategist says fewer people may be weakening US housing demand
J.P. Morgan strategist David Kelly says fewer people may need homes in the United States than many housing forecasts assume.
He expects population growth to average about 800,000 people a year over the next few years, which he says implies demand for about 320,000 new homes annually.
That is far below the roughly one million homes a year built in the first two decades of this century.
His view challenges claims that the US simply lacks homes: Zillow estimated a shortage of 4.7 million homes in 2024, while Kelly says supply is still greater than demand.
He points to rising rental and homeowner vacancy rates, fewer prospective buyers, and falling homebuilding as signs of a cooling market.
Kelly expects housing starts to fall to 1.24 million in 2027, after an estimated 1.32 million this year, while Harvard researchers also expect slower household growth to weigh on demand.
J.P. Morgan Asset Management strategist David Kelly says slower U.S. population growth may be weakening housing demand.
Kelly expects population growth of about 800,000 people a year over the next few years, implying demand for about 320,000 new homes annually.
He argues the U.S. still has excess housing supply, pointing to rising vacancy rates and fewer prospective buyers.
His view contrasts with estimates that the country has a substantial housing shortage.
Kelly expects housing starts to fall from 1.32 million this year to 1.24 million in 2027.
- Who
- David Kelly, chief global strategist at J.P. Morgan Asset Management.
- What
- Kelly says slower population growth may be weakening U.S. housing demand and that the country remains in a situation of net excess supply.
- When
- Kelly’s research note was dated Oct. 26; the article was published Nov. 2, 2026.
- Where
- The United States.
- Why
- Kelly points to slower population growth, reduced immigration and rising housing vacancies as factors limiting demand.
David Kelly
Zillow's housing-shortage estimate
Housing supply
David Kelly
Kelly says the U.S. is “still in a situation of net excess supply.
Zillow's housing-shortage estimate
Zillow estimated the U.S. was about 4.7 million homes short as of 2024.
Kelly’s research note discussed housing-market pressures, including slower population growth.
Net international migration fell to 1.3 million in the year through July, from 2.7 million a year earlier.
Homebuilding fell for an eighth time in 10 quarters, according to Kelly.
Fortune published its report on Kelly’s view of U.S. housing demand.
- Population growth forecast
- About 800,000 people a year over the next few years
- Implied annual housing need
- About 320,000 new units
- Zillow shortage estimate
- About 4.7 million homes as of 2024
- Rental vacancy rate
- 7.6% in the third quarter, up from 7.1% a year earlier
- Housing starts forecast
- 1.32 million this year; 1.24 million in 2027
What people are saying
The housing market is haunted
still in a situation of net excess supply
marking the 8th decline in residential construction in the last 10 quarters