Existing-Home Sales to Hit Just 3.9M in 2027, Goldman Says

Existing-home sales in the United States are on track for another grim year in 2027, with Goldman Sachs forecasting just 3.9 million existing-home sales, according to an Oct. 19 research note by economist Ronnie Walker. That would mark a slight decline from the roughly 4 million existing-home sales expected in 2026 and leave volumes about 26% below their 2019 level, underscoring the depth of the housing market's slowdown.

The forecast reflects the stubborn math facing the housing market. More than 95% of mortgage borrowers hold rates below today's market levels, Goldman Sachs noted, an effect that continues to choke off listings while mortgage rates stay elevated. With the average 30-year fixed rate climbing above 7% this autumn, few homeowners see a reason to sell and trade a cheap loan for a costly one.

Walker expects only modest relief on borrowing costs. The bank's economists see mortgage rates easing to around 6.4% by the end of 2027 — still well above the sub-4% rates millions of households locked in during the pandemic era. At that level, existing-home sales would remain historically depressed even as home prices keep edging higher.

Why Existing-Home Sales Stay Stuck

The lock-in effect is the central reason existing-home sales cannot seem to recover. When 95% of borrowers pay less than the going rate, the inventory of homes for sale stays thin, competition among buyers keeps home prices firm, and transaction volumes stagnate. Goldman Sachs argues the market remains frozen in this pattern for at least another year, with its 2027 forecast implying little improvement in turnover.

Demographics offer little near-term rescue. Household formation continues, but would-be sellers are choosing to stay put and renovate rather than move, further limiting the supply feeding resale transactions. New construction helps at the margins, yet builders cannot fill the gap left by missing resale listings.

What the Forecast Means for Prices

Even with existing-home sales scraping along near multi-decade lows, Goldman expects home prices to rise 0.8% in 2027. The combination of scarce inventory and steady — if muted — demand continues to support prices, a paradox of a market that is simultaneously unaffordable and undersupplied.

For buyers, that means affordability is unlikely to improve much next year. A 6.4% mortgage rate on a median-priced home still demands a historically large share of household income, and the modest projected price gain offers little help to those priced out today.

The scale of the lock-in is without modern precedent: with more than 95% of borrowers paying below-market rates, even homeowners who want to move face a financial penalty for doing so. That dynamic explains why listings remain scarce despite steady buyer interest, and why Goldman sees sales stuck near 3.9 million rather than rebounding toward the 5-million-plus pace of 2019.

Outlook for Existing-Home Sales

Goldman's call stands out as one of the more downbeat on Wall Street. If mortgage rates fall faster than expected — say toward 6% — sales volumes could surprise to the upside. But with inflation sticky and the Federal Reserve in no hurry to cut aggressively, most economists see the bank's subdued outlook as the base case.

The note, reported by WRE News and carried by outlets including Yahoo Finance, MarketWatch and Fortune, adds to a growing consensus that the housing market's recovery will be measured in years, not months.