J.P. Morgan Strategist Projects Demographic Demand for 320,000 New Homes a Year

J.P. Morgan Asset Management Chief Global Strategist David Kelly estimates slower U.S. population growth could bring demographic demand for new homes to 320,000 a year, far below the earlier pace.

In his Oct. 26 housing outlook, Kelly projects annual population growth of 800,000 over the next few years. At about 2.5 people per household, that pace implies demand for 320,000 additional housing units annually. The same calculation yielded roughly 1 million a year during the first two decades of this century.

The decline in net international migration is part of the population outlook. Net migration fell to 1.3 million in the year ending June 2025, from 2.7 million in the year ending June 2024. Those figures describe past migration, while Kelly's 800,000 figure is a forecast of total annual population growth.

The 320,000 figure is a demographic estimate and does not measure the existing housing shortage. A separate measure, comparing families sharing homes with vacant units available to rent or buy, put the U.S. deficit at about 4.7 million homes in 2024. The two figures address different questions and periods.

Kelly described the national market as having “net excess supply across the economy.” Third-quarter 2026 rental vacancies stood at 7.6% nationwide, up from 7.1% a year earlier. The homeowner vacancy rate held at 1.2% in both quarters.

A national assessment does not settle shortages by location or price. In 2024, 11 million extremely low-income renter households competed for 3.8 million affordable and available units. That gap describes access to homes at a particular price level, rather than demand generated by overall population growth.

Mortgage rates moved lower in the latest weekly comparison. The average 30-year fixed rate was 7.24% in the survey released Oct. 29, down from 7.32% on Oct. 22. That change concerns financing costs and does not alter what Kelly's demographic calculation measures.

Kelly’s outlook puts projected housing starts at 1.32 million for 2026 and 1.24 million for 2027. Those are projections for construction, while his 320,000-unit estimate concerns demand implied by population growth over the next few years.