Goldman Sachs Predicts Housing Market Freeze Through 2027

Goldman Sachs expects just 3.9 million existing-home sales in 2027 — 26% below 2019 levels — because more than 95% of American mortgage borrowers pay less than today's market rate. The forecast, published Monday by Goldman economist Ronnie Walker, says the "lock-in" effect from the 2020–2021 refinancing wave will keep the housing market frozen for at least two more years.

The core problem is simple. Moving means giving up a cheap loan for an expensive one. Rates have climbed another 140 basis points since their February trough, to roughly 7.4%, pushing even more borrowers below the market rate. Goldman expects mortgage rates to fall to 6.4% by the end of 2027, but its note says affordability will stay at historically poor levels.

What does the freeze do to millennials?

The data show the generation has already split. A Minneapolis Fed study found that homeownership among adults under 35 is 22% when every adult is counted, versus 37% when only household heads are. The gap marks who actually owns and who rents.

NAR's 2026 generational report sharpens the line. The overall first-time buyer share fell to a record-low 21%. Among younger millennials aged 27 to 35, the first-time share dropped from 71% to 60% in a single year. Older millennials, aged 36 to 45, are now the highest-earning buyers, with a median household income of $132,700 in 2024. Only a third of them were first-time buyers. NAR says older millennials "are leveraging equity to become move-up buyers."

The wealth numbers confirm the split. Millennials' total net worth rose from $3.94 trillion in 2019 to $15.95 trillion five years later, according to Federal Reserve data. Their housing wealth grew about $2.5 trillion between 2020 and 2024 even after new mortgage debt, a Wall Street Journal analysis found. Those gains went mostly to people who bought early. Younger millennials also carry more student debt: 39% do, with a median balance of $30,000, against 27% of older millennials, according to NAR.

"The housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in," NAR deputy chief economist Jessica Lautz said in April. She put it more bluntly: "It becomes a renter versus an owner economic scenario."

Why 2027 matters

Goldman's price forecast cuts both ways. It expects prices to rise 0.8% in 2027, after 1.1% in 2026 and 1.2% in 2025, against a historical average of roughly 5%. Flat prices mean the equity windfall that lifted early buyers is mostly over. They also offer buyers little relief, because borrowing cost, not price, is the barrier.

Goldman sees some supply easing. It expects the homeowner vacancy rate to rise from 1.2% to 1.4% by the end of 2027, with lock-in fading gradually after that. It also cites weaker demand: purchase-intention surveys are falling sharply, and reduced immigration is slowing household formation.

Erik Hembre, the Minneapolis Fed study's lead author, cautioned against excessive doom. "It's still true that most people, a majority of people, become homeowners at some point," he said — though the data suggest "some point" is arriving later. The median first-time homebuyer is now 40, the oldest on record, according to NAR's 2025 Profile of Home Buyers and Sellers.

How far does the divide run?

Parenthood is following the same curve. The U.S. total fertility rate fell to a record low of about 1.6 births per woman in 2024, down 23% since 2008, according to final CDC data released in June. A November 2025 working paper by Benjamin Couillard, an economics doctoral candidate at the University of Toronto, estimates rising housing costs account for 51% of the fertility drop between the 2000s and 2010s. A 2014 Journal of Public Economics paper by Lisa Dettling and Melissa Kearney found a $10,000 rise in home prices raises fertility 5% among owners and lowers it 2.4% among non-owners.

Inequality inside the cohort already outpaces the boomers'. A 2023 study in the American Journal of Sociology tracked about 12,000 Americans and found wealth inequality "is much more pronounced among Millennials than it was for Boomers." By 35, 49% of early millennials owned a home, against 62% of late boomers at the same age. About 14% of early millennials had negative net worth, versus 8.7% of boomers.

Timing compounds the gap. Urban Institute researchers Jung Hyun Choi and Laurie Goodman found that people who bought their first home at 25 to 34 held median home equity of close to $150,000 by their early 60s. Those who waited until 45 or older ended up with more than $100,000 less.

Then comes inheritance. Cerulli Associates projects $105 trillion will pass to heirs through 2048, with millennials inheriting more than any other generation: $46 trillion. Over half of all transfers, about $62 trillion, will come from the 2% of households that are high-net-worth or ultra-high-net-worth. Choi's research shows children of homeowners are already 7 to 8 percentage points more likely to own than children of renters. The great wealth transfer will flow along the same line Goldman's lock-in draws — toward the millennials whose parents owned.

By Amara Osei