Credit Calls

Research evidence excerpt

Credit Calls

J P M O R G A N North America Credit Research

08 July 2026

Wednesday, July 08, 2026

Feature Head of North America Credit

Research and Strategy

High Yield Housing: 2026 Midyear Outlook: Where Rates and Affordability AC Tarek Hamid

Constraints Meet M&A - Underweight on Valuation (Arjun Chandar)

(1-212) 834-5468

We remain Underweight HY Housing entering 2H26 as we continue to believe tarek.x.hamid@jpmorgan.com

a challenging fundamental backdrop will continue to weigh on collective J.P. Morgan Securities LLC

credit spreads. Affordability constraints continue to become tighter, mortgage

rates remain elevated, existing home sales remain suppressed, driving muted

repair/remodel activity, and multifamily development continues to be slow due to Credit Calls is our daily compilation of

high rates. We expect rates to be higher for longer (Global Head of Rates Strategy research reports from High Grade and

Jay Barry’s U.S. Interest Rate forecast here). We would highlight that HY Housing, High Yield corporate credit analysts

over the past 30 days, has been a material outperformer relative to the index and strategists.

following YTD underperformance on soft fundamentals. We believe this is due to

a renewed M&A bid following the Berkshire Hathaway / Taylor Morrison High Grade Home Page

transaction and the emergence of QXO as a consolidator on the Building Products

High Yield Home Pageside (recently closed its $17bn acquisition of TopBuild). To the extent we see the

market move back towards fundamentals over the prospect of broader M&A across Daily Economic Briefing

Housing, we expect spreads to widen in the second half of the year. As of July 6, Link to US Equity Research Top Stories

the HY Housing Index yielded 7.24%, 2bp inside the JPM HY Index.