Goldman sees US home sales sliding to 3.9 million in 2027 as mortgage rates top 7%

Goldman economists David Mericle and Ronnie Walker project 3.9 million existing-home sales next year, slightly under the bank's estimate of 4 million for 2026, according to an outlook Goldman Sachs published on Oct. 30. They expect home prices to rise 0.8% from December 2026 to December 2027, following gains of 1.2% in 2025 and 1.1% in 2026. ANI reported the forecast on Nov. 1.

The average 30-year mortgage rate stood at 7.32% on Oct. 22, according to the report. More than 95% of borrowers with a mortgage pay less than the current market rate, and 65% pay two percentage points or more below it, so selling means giving up a cheap loan. Goldman says rates jumped this year on the Iran war, pricier oil and the possibility that the Federal Reserve raises rates.

For builders, Goldman forecasts 870,000 single-family starts in 2027, down from about 900,000 this year, when starts are already running 3% below 2025. Residential fixed investment, which includes new home construction, is projected to shrink at annualized rates of 2.5%, 4% and 1% over the next three quarters, then grow 1% to 2% from the second half of 2027. The bank expects the homeowner vacancy rate to rise from 1.2% to 1.4% by the end of 2027 and says builder margins have shrunk back to pre-pandemic levels.

Goldman's credit strategists see mortgage rates easing to 6.4% in 2027, which would still leave affordability historically poor. If rates stay where they are, the economists would lower their growth forecasts for residential investment by one or two percentage points to the end of 2027.