High mortgage rates to hit US home sales: Goldman Sachs
ANINew Delhi High mortgage rates are expected to weigh on US home sales and slow house price growth to less than 1 per cent in 2027, as rising borrowing costs continue to hurt affo...
A recent Goldman Sachs report warns that rising mortgage rates will negatively impact the US housing market in 2027. Existing home sales are projected to drop to 3.9 million, down from an estimated 4 million in 2026 and 26% below 2019 levels. Home price growth is also expected to slow to an anemic 0.8% in 2027, compared to 1.1% in 2026 and 1.2% in 2025.
The investment bank attributes this slowdown to increasing borrowing costs, which are making homes less affordable. As of October 22, 2026, the average rate on 30-year US mortgages had risen to 7.32%, making home purchases more expensive. Over 95% of mortgage borrowers currently have rates below prevailing market levels, while 65% have rates at least two percentage points lower.
This has led to reluctance among homeowners to sell, as purchasing another property would require taking out a mortgage at significantly higher rates. Goldman Sachs also anticipates a decline in single-family housing starts to 870,000 in 2027 from an estimated 900,000 in 2026. However, the bank expects mortgage rates to ease to around 6.4% in 2027, which could support a gradual recovery in housing activity during the second half of the year.
Despite this potential improvement, the report emphasizes that affordability will remain historically weak, with housing demand expected to remain tepid.
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