Demographics Point to 320,000 Homes a Year

J.P. Morgan Asset Management's David Kelly estimates annual U.S. housing demand from population growth and household size.

Updated on Nov. 2, 2026 in Residential

Isometric editorial illustration of an unfinished wooden house frame beside a stack of lumber on a flat open lot, in muted oxblood, teal, and mustard. — J.P. Morgan Asset Management's David Kelly estimated on Oct. 26 that population growth implies demand for about 320,000 new U.S. homes a year, far below the roughly 1 million built annually in the early 2000s. AI Illustration. Upload story photo >

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J.P. Morgan Asset Management strategist David Kelly estimated demographic demand for 320,000 new U.S. homes annually in his Oct. 26 housing outlook. The figure rests on annual population growth of 800,000 people and an average household size of about 2.5 people.

Why it matters

The estimate lands well below the roughly 1 million units a year produced in the first two decades of this century, a gap that bears on affordability. Shifts in net international migration are central to the projection's uncertainty.

Rental vacancies reached 7.6% in the third quarter of 2026, up from 7.1% a year earlier, while the homeowner vacancy rate held at 1.2%. A separate measure put the U.S. housing deficit at about 4.7 million homes in 2024.

The players

David Kelly

David Kelly is a strategist at J.P. Morgan Asset Management who publishes outlooks on the U.S. economy and housing markets.

J.P. Morgan Asset Management

J.P. Morgan Asset Management is the investment arm of JPMorgan Chase, one of the largest asset managers in the world.

The details

Kelly derived the 320,000 figure by dividing annual population growth of 800,000 by roughly 2.5 people per household, and he projected housing starts of 1.32 million for 2026 and 1.24 million for 2027. Net international migration fell to 1.3 million in the year ending June 2025 from 2.7 million the year before.

Year ending June 2024: net international migration was 2.7 million.
Year ending June 2025: net international migration fell to 1.3 million.
Oct. 26, 2026: Kelly released his housing outlook.
Oct. 29, 2026: the survey showed a 7.24% average 30-year fixed mortgage rate.

Demand Benchmark

The 320,000-unit estimate sits far below the roughly 1 million units a year built during the first two decades of this century. Kelly's calculation links housing need directly to population growth and household size rather than to recent construction totals.

For buyers and renters, a demand gap of this size can keep home prices and rents elevated even as vacancy rates climb. The 7.24% average 30-year fixed mortgage rate in the Oct. 29 survey sets the monthly cost of financing any purchase.

The takeaway

Housing affordability depends as much on how many homes get built as on how many people arrive and form households. Tracking migration and household formation alongside construction data gives a clearer picture of where pressure is building.