JPMorgan Says US Home Prices Will Freeze in 2026 — What Buyers and Investors Should Do Now

Why JPMorgan’s 2026 forecast matters for real estate USA

JPMorgan Global Research is predicting that home prices in the US will register 0% growth in 2026, after nearly doubling over the past decade. That flat line is more than a projection — it is a potential turning point for property buyers, investors and developers who have been navigating a market still unsettled by high borrowing costs, pandemic-era construction booms and shifting regional demand. In the first 100 words we want to be clear: this piece is about the real estate USA outlook and what it means for buying, selling and investing.

The forecast is a reminder that the housing market no longer moves in lockstep across the country. For some buyers it opens a window of opportunity. For some sellers and spec builders it signals trouble ahead. For investors, the message is that selectivity will be essential.

JPMorgan’s baseline: prices stall as supply and demand offset each other

JPMorgan’s note, published Jan. 27, lays out a simple supply-and-demand story. The bank expects a modest improvement in demand — helped by cheaper adjustable-rate mortgages as the Federal Reserve eases — to be offset by an uptick in supply as builders clear unsold inventory. The result: 0% price growth in 2026.

Key facts from JPMorgan and public data:

• Home prices were up 1.9% year-over-year in November, according to the Federal Housing Finance Agency. That is down sharply from 4.8% annual growth in October.
• JPMorgan estimates the US housing shortfall at around 1.2 million homes, a figure that is well below the consensus view.
• The 30-year fixed mortgage rate remains above 6%, while adjustable-rate mortgages (ARMs) are expected to dip if the Fed lowers borrowing costs later in the year.
• Builders commonly offer mortgage-rate buydowns of 100 to 200 basis points to move inventory.

John Sim, head of securitized products research at JPMorgan, says the combination of a modest demand lift and easing supply pressures could be enough to keep sales from weakening further. We read that as a cautious outlook: not a rebound, but not a collapse.

Supply pockets and regional winners and losers

One of the clearest takeaways from the note and accompanying data is that national averages mask stark regional differences.

• Prices are falling most quickly on the West Coast and in parts of the Sunbelt. Builders aggressively added supply to meet pandemic-era migration trends, and now that extra inventory is weighing on values.
• Zillow data shows Texas home prices were down 2.4% year-over-year, while Florida prices were down 5.1%. These states were major destinations during the relocation wave and saw heavy building activity.

Why this matters for buyers and investors:

• Markets with inventory overhang will be where bargains are most likely — but they carry risks tied to local job markets and future demand.
• Tight markets, those with persistent shortages relative to household formation, are likelier to hold value, even when national growth stalls.

JPMorgan also points out that when you look back 30 years, housing completions broadly matched household formation. That suggests some of the recent overbuilding may correct, but it will take time.

How much difference will Trump’s housing measures make?

President Donald Trump has pushed a range of policies aimed at improving affordability. JPMorgan’s analysis is unambiguous: these measures will barely move market-wide prices.

The key proposals and JPMorgan’s assessment:

• A proposed ban on institutional investors purchasing single-family homes. JPMorgan notes institutional investors account for only 1% to 3% of the market, so banning them from purchases is “unlikely to be a game changer.” In practice, many of those investors are now building homes to serve the rental market; preventing that activity could tighten supply and have the opposite effect.
• A directive for Freddie Mac and Fannie Mae to buy up to $200 billion in mortgage-backed securities to push rates down. JPMorgan calculates that $200 billion is about 1.4% of the $14.5 trillion US mortgage market, and would reduce mortgage rates by about 10 to 15 basis points at most. The markets briefly reacted to such moves and then rates reversed.

Trump himself has signaled he does not want policy that drives home prices down. At a Jan. 29 cabinet meeting he said: “I don’t want to drive housing prices down. I want to drive housing prices up for people that own their homes.” That political preference matters because any program aggressively aimed at reducing home values would run counter to that rhetoric.

What this means practically: policy tinkering at the margins is unlikely to reverse the fundamentals of supply and demand. Buyers should not bank on federal intervention to create broad affordability gains in 2026.

Mortgage market outlook and practical tactics for buyers

Mortgage rates are a primary driver of buyer affordability. JPMorgan expects a decline in ARMs as the Fed cuts rates later in the year, while the 30-year fixed rate stays above 6% in the near term.

Consider these tactics depending on your position:

• For buyers who can tolerate rate volatility: an adjustable-rate mortgage (ARM) might get you into a home at a lower initial rate if the Fed’s easing lowers ARM pricing.