Goldman Sachs predicts US housing market to cool further in 2027

Goldman Sachs warned that the US housing market will face a deeper slowdown in 2027, with expected existing-home sales of 3.9 million, marginally fewer than this year and about 26 % below the 2019 pre-pandemic peak. The outlook reflects mortgage rates that have risen above 7%, discouraging prospective buyers and creating a “mortgage-rate lock-in” where over 95 % of current borrowers enjoy rates lower than today’s market.

This dynamic reduces incentives for homeowners to sell, keeping inventory tight despite a modest increase in listings. The Mortgage Bankers Association echoed the gloom, forecasting a 5 % drop in total single-family mortgage lending to just under $2 trillion and a slowdown in new-home construction, with home-price growth expected to dip before a gradual rebound in 2028. While demographic factors and potential wage gains offer some optimism, they may not be enough to revive activity. The bearish sentiment has already weighed on housing-related ETFs, which have posted double-digit losses this year.