![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/10\/halloween-house-queensbury.jpg?w=2048\")
<\/p>\n<\/p>\n
\u201cThe housing market is haunted,\u201d according to David Kelly, the chief global strategist at J.P. Morgan Asset Management. <\/p>\n
He lists the ghosts in his widely read Oct. 26 research note: more than a decade of too-easy money, tariffs, and immigration policies that raise the cost of building homes while limiting the number of people who need them, and a Fed whose rate swings hit housing harder than almost anything else.<\/p>\n
The one that should get the most attention is the people who aren\u2019t showing up. Kelly said he expects U.S. population growth of just 800,000 a year over the next few years. With an average household of about 2.5 people, he writes, that \u201cimplies a demographic need for just 320,000 new housing units per year,\u201d compared with roughly 1 million per year in the first two decades of this century.<\/p>\n
That cuts against the story most Americans have heard about housing: that the country simply hasn\u2019t built enough. Zillow estimated in July the U.S. was about 4.7 million homes short as of 2024, based on how many families are doubled up with unrelated people compared with how many homes sit vacant for rent or sale. Kelly\u2019s read is that the country is \u201cstill in a situation of net excess supply.\u201d<\/p>\n
Thursday\u2019s GDP report bore that out, Kelly told Fortune by email. Homebuilding fell again in the third quarter, \u201cmarking the 8th decline in residential construction in the last 10 quarters.\u201d But \u201cthe homebuilding decline is still relatively modest compared to the very fast increase in AI-related capital spending,\u201d he said.<\/p>\n
Where the people went<\/p>\n
In the first 20 years of this century, Kelly wrote, the U.S. population grew by an average of 2.4 million people a year\u2014about 1.5 million from births minus deaths and about 900,000 from net immigration. The natural increase peaked at 520,000 in 2025, he writes, and has likely resumed a steady decline as the population ages and birth rates fall.<\/p>\n
Immigration swung harder. Net international migration fell to 1.3 million in the year through July 2025 from 2.7 million a year earlier, and the Census Bureau projected it would be about 321,000 by July 2026 if trends continued. Kelly estimated that deportations are now almost canceling out legal net immigration, which is still positive but smaller. He said he expects that to hold \u201cregardless of the outcome of the midterm elections,\u201d because enforcement is largely up to the administration, and Congress and the White House are unlikely to agree on an immigration reform bill.<\/p>\n
The empty-house signs<\/p>\n
Kelly pointed to vacancies. Over the past four years, he writes, the rental vacancy rate rose from 5.6% to 7.3%, and the homeowner vacancy rate from 0.8% to 1.2%. Census figures released Wednesday put rental vacancy at 7.6% in the third quarter, up from 7.1% a year earlier. Between the second quarter of 2024 and the second quarter of 2026, he writes, the housing stock grew by about 2.8 million units.<\/p>\n
Buyers have thinned out. The National Association of Home Builders\u2019 measure of buyer traffic fell to 18 in October, its lowest level since April 2012 excluding the start of the pandemic, and 43% of builders cut prices. Kelly expects housing starts of 1.32 million this year, the weakest since 2019, falling to 1.24 million in 2027.<\/p>\n
Others see demand cooling, too. Harvard\u2019s Joint Center for Housing Studies said in June that household growth \u201chas slowed sharply\u201d and that reduced immigration is expected to dampen housing demand further. A Mortgage Bankers Association white paper projects 8.6 million new households from 2025 to 2035, down from 10.1 million in 2010 to 2020.<\/p>\n
The anomaly<\/p>\n
Fewer buyers haven\u2019t meant cheaper mortgages. The 30-year fixed rate averaged 7.32% last week, according to Freddie Mac. Kelly notes that\u2019s below its 50-year average of 7.68%. From January 2008 to December 2021, the rate averaged just 4.15%. <\/p>\n
\u201cIt is important to recognize that this period was the anomaly, rather than today,\u201d he writes, and there\u2019s \u201clittle reason to believe that mortgage rates will fall much below 7.0%\u201d without a recession.<\/p>\n
Kelly said he expects the Fed to raise rates in December and thinks weak housing could make that the last hike of this cycle. What would change his mind, he told Fortune, is if \u201cwage growth suddenly picked up,\u201d or if inflation expectations priced into Treasury inflation-protected securities \u201cwere to rise significantly.\u201d<\/p>\n
Builders are squeezed from both sides. Construction workers are hard to find, Kelly writes, and wages in the industry are rising faster than elsewhere, partly because of the swing in immigration and partly because data-center construction is competing for the same workers. Tariffs and the same infrastructure boom have pushed up the cost of materials.<\/p>\n
Kelly told Fortune it\u2019s hard to put a number on how much the AI boom is adding to the cost of building a home. But spending on data centers rose 73% in the year through August, to an annual rate of $85 billion, he said, and \u201cit is likely that the resource squeeze from data centers will intensify in 2027.\u201d<\/p>\n
The ghosts are hardest on the young. Homeownership has fallen since 2022, Kelly writes, \u201cwith a much sharper recent decline for those under age 35.\u201d He calls it a decline that is \u201cpostponing the reasonable aspirations of young people to be able to marry, settle down and build a family in their own home.\u201d<\/p>\n
Asked whether that drop is mostly about mortgage rates, Kelly pointed elsewhere. <\/p>\n
\u201cI think it is a combination of tougher lending standards and the reality that older households have had more of a chance to accumulate a bigger down payment,\u201d he said.<\/p>\n
His forecast in the note: Housing \u201cremains haunted for now with many personal housing nightmares to be endured.\u201d<\/p>\n
Generative AI was used for research assistance and\/or transcription of this article. The reporter independently reported and verified the factual claims in this article, and a human editor reviewed it before publication.<\/p>\n
#Housings #real #problem #people #homes #J.P #Morgans #David #Kelly<\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cThe housing market is haunted,\u201d according to David Kelly, the chief global strategist at J.P….<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[245],"tags":[5737,1643,1433,867,23978,1981,7228,6094,2205,23979,6022,363,823,62],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/19562"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19562"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/19562\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}