Home Price Momentum Faces a Test
After years of rapid gains, analysts say changing supply and demand trends could usher in a more balanced housing market in the coming year.
WASHINGTON — U.S. home prices are expected to remain flat in 2026 as modest shifts in supply and demand offset each other, according to the 2026 year-ahead forecast from JPMorgan Global Research.
Analysts project 0% price growth next year after nearly doubling over the past decade. A slight pickup in demand, supported by lower borrowing costs and continued mortgage rate buydowns from builders, is likely to balance recent increases in supply, the bank said.
“We think this could be enough, along with a rising wealth effect, to shift demand higher while supply increases subside,” John Sim, head of securitized products research at JPMorgan, said in Fortune magazine.
Price gains have slowed in recent months. Federal Housing Finance Agency data show prices rose 1.9% in November from a year earlier, down from 4.8% annual growth in October. JPMorgan said prices are declining in some regions, particularly parts of the West Coast and Sunbelt, including Florida, where construction expanded during the pandemic.
JPMorgan estimated the U.S. housing market has a shortfall of 1.2 million homes, though supply has increased in the last few months. Sim added, "Overbuilding is a sure path to home price declines, and builders have been navigating an increasing supply of new homes.
The bank also new housing proposals, including directing Fannie Mae and Freddie Mac to purchase up to $200 billion in mortgage-backed securities, may not significantly lower mortgage rates or boost demand.
Source: Fortune (02/09/26) Ma, Jason
© Copyright 2026 Smithbucklin