NEW YORK: High mortgage rates are set to keep a firm grip on the US housing market in 2027. Goldman Sachs Research expects fewer existing-home sales and weaker homebuilding, even as the country faces a housing shortage. Home prices could still rise, but only slightly.
The bank forecasts 3.9 million existing-home sales next year, down from an estimated 4 million in 2026. That would leave sales 26% below 2019 levels. National home prices are expected to rise just 0.8% from December 2026 to December 2027, following projected gains of 1.1% this year.
For Americans hoping for a sharp drop in prices, the forecast offers little comfort. Goldman Sachs expects a market held back by costly loans, not a broad price collapse. Buyers may still struggle to afford a home, while owners with cheap mortgages have strong reasons to stay put.
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Mortgage Rates Keep the Market Stuck
The main problem is the cost of borrowing. Rates for 30-year mortgages reached 7.32% as of October 22, according to the outlook. Goldman Sachs Research’s credit strategists expect rates to fall in 2027, but remain elevated at around 6.4%.
That would bring some relief.
Yet the bank warns that even this decline would leave housing affordability at historically poor levels. A lower rate does not mean a cheap mortgage, especially when the home itself remains expensive.
The US housing market 2027 outlook also points to a powerful reason why more owners are not listing their homes: the mortgage “lock-in” effect.
More than 95% of mortgage borrowers have rates below current market levels. About 65% have rates at least two percentage points below those levels. Many would face a large rise in borrowing costs if they sold and bought another home.
The low rates secured through purchases and refinancing in 2020 and 2021 now carry a financial benefit that owners may be reluctant to give up. Moving means paying off that older loan and, for buyers who need financing, taking on a new mortgage at a higher rate.
This creates pressure on both sides of the market:
- Buyers face high borrowing costs
- Existing owners face a steep financial cost to moving
- Fewer owners have an incentive to sell
- Sales remain weak even with a national housing shortage
The result is a market where the need for housing does not easily turn into completed deals. A household may want to move, but the monthly payment on the next home can make that choice hard to justify.
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Sales Could Fall Again, But Prices May Barely Move
Goldman Sachs expects existing-home sales to fall by about 100,000 in 2027 compared with its 2026 forecast. The projected total of 3.9 million shows how far activity remains below the level seen before the pandemic.
The bank’s main forecasts are:
| Housing Measure | Goldman Sachs Outlook |
| Existing-home sales in 2026 | 4 million |
| Existing-home sales in 2027 | 3.9 million |
| 2027 sales compared with 2019 | 26% lower |
| National home price growth in 2026 | 1.1% |
| National home price growth in 2027 | 0.8% |
| Mortgage rate outlook for 2027 | Around 6.4% |
| New home construction | Expected to decline |
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Home price forecasts are measured December over December. They describe the expected change in national prices, not a promised result for every city or home. The sales and rate figures are forecasts, not confirmed outcomes.
The key distinction is between slower sales and falling prices. Goldman Sachs expects fewer transactions, but its national forecast still shows a small price gain. Weak demand alone does not lead the bank to predict a broad decline in home values.
This matters for buyers waiting for a bargain. Under this outlook, time alone may not bring a much cheaper home. A fall in rates could ease the payment burden, but prices would remain broadly firm at the national level.
Sellers face a different problem. A stable price does not mean a busy market. With fewer sales expected, the forecast points to weak activity rather than a strong rebound in the number of homes changing hands.
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Housing Shortage May Not Be Enough to Lift Construction
The slowdown is also expected to reach new home construction. Goldman Sachs says the pressure from poor affordability is likely to outweigh the support that a longstanding housing shortage would otherwise provide.
Economists Ronnie Walker and David Mericle expect affordability to become an even greater drag on activity in 2027. Their outlook links this year’s rate rise to the Iran War, higher oil prices and the prospect of Federal Reserve rate hikes.
The central message is clear: America can need more homes and still build fewer of them. Need and buying power are not the same. When financing remains costly, demand can stay out of reach for households that would otherwise buy.
For 2027, Goldman Sachs sees gradual mortgage relief, not a full market reset. Its forecast leaves buyers facing high costs, owners reluctant to move and builders facing weaker activity. A cheaper loan may help, but the bank does not expect it to end the housing squeeze. (goldmansachs)
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