Supply and demand dynamics are expected to keep U.S. Home prices essentially flat in 2026, despite efforts by the Trump administration to improve affordability, according to a recent forecast from JPMorgan Global Research.
The analysis, published on , projects a 0% growth rate for home prices nationally, following nearly a decade of substantial increases. This stagnation is anticipated as a slight uptick in demand counterbalances a growing supply of homes.
A contributing factor to potential demand improvement is the expected decline in adjustable-rate mortgages (ARMs) as the Federal Reserve potentially eases monetary policy later this year. However, 30-year fixed mortgage rates are still projected to remain elevated, staying above 6%, even with potential Fed cuts. Homebuilders are also continuing to offer rate buydowns to attract buyers and clear existing inventory.
“We think this could be enough, along with a rising wealth effect, to shift demand higher while supply increases subside,” stated John Sim, head of Securitized Products Research at JPMorgan, in the report.
The forecast follows a period of muted demand in 2025, where prospective buyers were hesitant due to persistently high prices, while a growing number of homeowners listed their properties for sale. This resulted in some sellers being forced to reduce their asking prices or withdraw their listings altogether.
Data from the Federal Housing Finance Agency indicates that home prices in were up 1.9% year-over-year, a significant decrease from the 4.8% annual growth recorded in .
Regional variations are also becoming more pronounced. Areas that experienced substantial housing supply growth during the pandemic-era construction boom are now seeing price declines. The West Coast and Sun Belt regions are currently experiencing the steepest drops, though specific states like Texas and Florida were not explicitly mentioned in the JPMorgan report.
According to Zillow data, Texas home prices are down 2.4% year-over-year, while Florida home prices have fallen by 5.1%.
JPMorgan estimates the overall U.S. Housing market has a shortfall of approximately 1.2 million homes, a figure lower than the commonly cited range of 3-5 million. The bank notes that housing completions over the past 30 years have generally kept pace with household formation. “Overbuilding is a sure path to home price declines, and builders have been navigating an increasing supply of new homes,” Sim added.
Trump Administration’s Efforts Face Limited Impact
Despite the administration’s initiatives to address housing affordability, JPMorgan anticipates only gradual improvements in home sales. President Trump has proposed a ban on institutional investors purchasing single-family homes, aiming to reduce competition for first-time homebuyers. However, JPMorgan analysts believe this ban will have a limited effect, as institutional investors currently account for only 1% to 3% of the market.
the report points out that many institutional investors have shifted their focus to homebuilding, specifically to supply the rental market. “If the proposed ban also prevents these large operators from building their own homes or communities, we believe this could potentially have the opposite effect and theoretically tighten overall supply, as it would prevent more rental homes from entering the market,” explained Michael Rehaut, head of U.S. Homebuilding and building products research at JPMorgan.
Another measure taken by the administration involves directing Freddie Mac and Fannie Mae to purchase up to $200 billion in mortgage-backed securities to lower mortgage rates. JPMorgan notes that this $200 billion purchase represents only 1.4% of the total $14.5 trillion mortgage market and is expected to reduce rates by a maximum of 10-15 basis points. The initial impact on rates was short-lived, with rates rebounding a few weeks later.
“Secondly, most homebuilders already offer potential buyers mortgage rate buydowns of 100 bp to as much as 200 bp below the prevailing mortgage rate,” Rehaut added. “we do not believe a modest lowering of the market mortgage rate will have a material impact on demand.”
Notably, President Trump has expressed a preference for maintaining or even increasing home prices, citing the wealth gains experienced by homeowners in recent years. During a Cabinet meeting on , he stated that lowering home prices would be detrimental, as it would diminish the wealth of existing homeowners.
“I don’t want to drive housing prices down. I want to drive housing prices up for people that own their homes, and they can be assured that’s what’s going to happen,” Trump said.
