MBA White Paper: Demographic Trends Could Reshape Future Housing Demand
June 22, 2026
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WASHINGTON, D.C. (June 22, 2026) – For more than a decade, policymakers, researchers, and industry stakeholders have focused on addressing a persistent shortage of housing in the United States. However, changing demographic and market conditions suggest that the housing landscape may look markedly different in the years ahead. This is according to a new white paper released today by the Mortgage Bankers Association (MBA) examining recent and emerging shifts in U.S. housing demand and supply.
"Over the past several years, growth in housing demand has slowed as new housing supply has entered the market in many regions," said Mike Fratantoni, MBA’s SVP and Chief Economist. “While affordability challenges remain significant, MBA’s research highlights the importance of looking beyond today's market conditions to understand the long-term forces shaping housing demand. These findings can help industry participants and policymakers better prepare for future changes in housing and mortgage market dynamics."
Implications of a Persistent Slowing in Housing Demand examines how demographic, economic, and housing market trends have evolved since the financial crisis and assesses their implications for future housing demand. The report analyzes changes in household formation, housing construction, affordability, and population growth, and explores how slowing demographic growth may affect housing supply-demand balances, home prices, and mortgage market activity over the coming decade.
The report is authored by Mike Fratantoni, MBA Senior Vice President and Chief Economist; Joel Kan, CMB, MBA Vice President and Deputy Chief Economist; Judie Ricks, MBA Associate Vice President, Commercial Real Estate Research; and Edward Seiler, Executive Director of the Research Institute for Housing America and MBA Associate Vice President, Housing Economics.
Key Findings from Implications of a Persistent Slowing in Housing Demand include:
- Following the financial crisis, strong millennial household formation contributed to housing demand that outpaced construction, resulting in rising home prices and rents and estimates of a national housing shortfall ranging from 1.5 million to 7.3 million units.
- During the pandemic, historically low mortgage rates accelerated housing demand and further increased home prices and rents. Meanwhile, homebuilders responded with increased construction activity, particularly in multifamily housing and in the South and West.
- By 2025, housing market conditions began to rebalance as demand cooled and newly constructed housing entered the market. Vacancy rates increased, rent growth slowed, and for-sale inventory expanded, particularly in Sun Belt markets.
- Housing affordability remains strained in many markets, but has recently improved as income growth has outpaced increases in home prices and rents.
- Demographic trends — including population aging, lower fertility rates, smaller younger adult cohorts, and reduced immigration – are expected to slow household formation over the next decade.
- Housing supply is likely to increase gradually as aging Baby Boomers transfer homes to younger generations.
- If residential construction remains elevated while household formation slows, housing supply growth could outpace demand growth in some markets, placing downward pressure on home prices.
- Slower housing demand growth could have important implications for the mortgage industry, including effects on mortgage origination volumes, borrower equity accumulation, and credit performance.