Stuck in the Lock: Goldman Forecast and Broader Data Signal Prolonged Housing Affordability Drought Through 2027

Goldman Sachs economist Ronnie Walker’s mid-year housing outlook paints a sobering picture for prospective buyers: mortgage rates are projected to hold near 6.43% through the end of 2026 before easing only modestly to around 6.3% in 2027, while national home prices continue their gradual climb. This combination sustains an ultra-low-turnover market dominated by the “lock-in” effect, where roughly 80% of existing mortgage holders enjoy rates well below current market levels. Existing home sales are expected to reach just 4.2 million in 2026—22% below 2019 levels—before inching to 4.3 million the following year. Residential investment has already contracted, and single-family starts are moderating even as the longstanding shortage eases only gradually.

Independent forecasts align closely. Fannie Mae and multiple bank economists anticipate 30-year fixed rates hovering between 6.3% and 6.5% through 2027, with limited relief from Federal Reserve policy. The National Association of Realtors notes that while inventory is rising modestly and the lock-in effect is slowly decaying, sales remain suppressed. Broader analyses highlight how elevated rates and constrained supply have entrenched a structural affordability crisis, transferring wealth from new buyers and renters toward existing homeowners via inflated asset values and reduced mobility. Policy choices around prolonged high rates and slow permitting/supply responses have amplified these dynamics, creating persistent barriers to wealth-building for younger cohorts and exacerbating intergenerational divides.