US housing market faces fresh affordability headwind in 2027
“Inflation is too high, leading central banks to raise short-term rates, while budget deficits and debt are unsustainably high, leading bond investors to push up longer-term rates,” he said.
| Forecast metric | Goldman Sachs Research | Fannie Mae (Oct 2026) | Mortgage Bankers Association (Oct 2026) |
|---|---|---|---|
| 30-yr fixed rate | ~6.4% by end of 2027 | 7.5% all four quarters; revised up from 6.7% | Above 7% throughout 2027; ~7.1% by year-end |
| Existing home sales | 3.9 million 26% below 2019 levels | 4.06 million revised down from 4.22M | Slight dip from 2026 expected |
| Home price growth | 0.8% December-over-December | 0.6% HPI; down from 2.7% in 2026 | Not specified |
| Single-family starts | 0.87 million down from est. 0.90M in 2026 | Not specified | Not specified |
| Total originations | Not specified | ~$1.87 trillion down ~11% from $2.09T in 2026 | Falls year-on-year volume cut across all channels |
| Refinance volume | Not specified | $430 billion down from $655B; share falls 31% → 23% | $571 billion down 17% year-on-year |
| Purchase volume | Not specified | ~$1.43 trillion broadly stable | Slight dip from 2026 |
| Source | Goldman Sachs Research, Oct 2026 — goldmansachs.com | Oct 2026 ESR Group forecast — MPA coverage | MBA Annual Conference, Chicago — MPA coverage |
All figures refer to the 2027 full-year forecast period. “Not specified” denotes metrics not covered in reviewed source materials. HPI = Fannie Mae Home Price Index. Sources: Goldman Sachs Research; Fannie Mae Economic and Strategic Research Group; Mortgage Bankers Association. MPA coverage verified October 2026.
Homebuilding faces further pressure
New home sales have been sliding under the weight of elevated borrowing costs, falling 3% in 2026 against the prior year.
Goldman Sachs Research expects single-family starts to total 0.87 million in 2027, down from an estimated 0.90 million in 2026.
Residential fixed investment – which includes new construction and is a component of gross domestic product – is forecast to contract 2.5% and 4% annualized in the first two quarters of 2027, before recovering to a 1% to 2% growth pace in the second half of the year as borrowing costs ease.
High mortgage rates are set to keep US housing activity subdued, with Goldman Sachs Research also flagging reduced immigration as a drag on household formation.
