Where Will U.S. Home Prices Go Through 2027? Here’s What Goldman Sachs and Moody’s Predict
The question of where U.S. home prices are headed in the coming years is one of great interest to investors, homeowners, and potential buyers alike. With the real estate market being a significant component of the national economy, understanding future trends is crucial. Two major financial institutions, Goldman Sachs and Moody’s, have offered their forecasts for the U.S. housing market extending through 2027, providing a glimpse into what might lie ahead.
Goldman Sachs and Moody’s are among the few to venture into multiyear forecasts in the realm of home prices, offering a broader perspective than the commonly found annual or 12-month outlooks. Their projections give us insights not only into the expected national trends but also hint at regional variations that could occur over this period.
It’s important to note that national home price growth predictions do not rule out the possibility of regional home price corrections. If Goldman Sachs’ forecast materializes, certain areas might still experience price adjustments despite overall national growth. Likewise, should Moody’s prognosis of a more stagnant price landscape come to pass, we might still see declines in specific local markets.
Goldman Sachs’ Outlook on Home Prices
Goldman Sachs analysts provided an optimistic view grounded in strong housing demand supported by demographic trends and a robust labor market. They predict a moderate rise in housing supply alongside this firm demand, leading to a slight uptick in homeowner vacancy rates. Specifically, Goldman Sachs forecasts a vacancy rate of 1.1% for Q4 2025, a marginal increase from 1.4% in 2019. Despite a slightly easing housing market, the firm expects national home prices to witness a growth of 3.8% year-over-year for the current year.
Moody’s Perspective on Future Home Prices
Moody’s chief economist, Mark Zandi, shares a somewhat different outlook. Zandi anticipates an increase in homes for sale, driven by demographic shifts such as death, divorce, children, or job changes. Additionally, he believes that lower mortgage rates will help ameliorate the constraints of interest rate lock, supporting housing demand. However, the expected surge in housing supply is projected to outpace demand, potentially dampening home price gains.
Zandi’s broader perspective suggests a period of sideways movement for national home prices. This stability, rather than indicating a lack of growth, reflects a balance between supply and demand dynamics in the housing market.
Comparing Predictions and Historical Trends
When juxtaposing these forecasts with historical data, Goldman Sachs aligns its expectations closely with the historical annual average growth of the Case-Shiller National Home Price Index, which stands at approximately +4.5% from 1988 to 2023. This suggests a belief in the market’s ability to maintain its historical growth trajectory.
On the other hand, Moody’s forecast of a leveled price movement breaks from the traditionally more dynamic view of steadily climbing home prices. It underscores a potential shift in the market dynamics where supply finally catches up with demand, leading to a stabilization of prices rather than the significant swings seen in previous years.
Conclusion
Understanding these forecasts from Goldman Sachs and Moody’s provides a valuable perspective on what the future may hold for the U.S. housing market through 2027. While their outlooks differ in growth expectations, both highlight the importance of factors like housing supply, demographic shifts, and mortgage rates in shaping future home prices. Investors and homeowners would do well to consider these insights when planning for the years ahead, keeping in mind the potential for regional variations against the backdrop of national trends.
