{"id":660806,"date":"2026-10-20T22:54:16","date_gmt":"2026-10-20T22:54:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/660806\/"},"modified":"2026-10-20T22:54:16","modified_gmt":"2026-10-20T22:54:16","slug":"goldman-sees-a-housing-freeze-through-2027-it-would-lock-in-an-economic-divide-between-millennials","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/660806\/","title":{"rendered":"Goldman sees a housing freeze through 2027. It would lock in an economic divide between millennials"},"content":{"rendered":"

More than 95% of American mortgage borrowers pay less than today\u2019s market rate, and 65% pay at least 2 percentage points less, a legacy of the mass refinancing of 2020 and 2021, when rates hit record lows<\/a>. In a note published Monday, Goldman Sachs<\/a> economists say that gap will keep the housing market stuck through 2027, with just 3.9 million existing-home sales, 26% below 2019 levels. The note does not mention millennials, but its findings bear on the split inside that generation.<\/p>\n

The main reason for the diagnosis by Goldman economist Ronnie Walker is \u201clock-in.\u201d Moving would mean giving up a cheap loan for an expensive one.<\/p>\n

Goldman\u2019s strategists expect mortgage rates to fall to 6.4% by the end of 2027. Even so, the note says affordability will stay at historically poor levels. Rates have climbed another 140 basis points since their February trough, to roughly 7.4%. That pushes even more borrowers below the market rate and raises the bar for anyone who still needs a loan.<\/p>\n

\"\"<\/p>\n

Two millennial generations<\/p>\n

The data show millennials have already split. A Minneapolis Fed study<\/a>, as reported by Fortune in July<\/a>, found that homeownership among adults under 35 is far lower than the standard measure suggests: 22% when every adult is counted, versus 37% when only household heads are.<\/p>\n

National Association of Realtors (NAR) data<\/a> show where the line runs. In NAR\u2019s 2026 generational report, the overall first-time buyer share fell to a record-low 21%. Among younger millennials who bought homes, ages 27 to 35, the first-time share fell from 71% to 60% in a year. Older millennials, ages 36 to 45, are now the highest-earning buyers, with a median household income of $132,700 in 2024. Only a third of older millennial buyers were first-time buyers; NAR says older millennials \u201care leveraging equity to become move-up buyers.\u201d<\/p>\n

Millennials\u2019 total net worth rose from $3.94 trillion in 2019 to $15.95 trillion five years later, according to Federal Reserve data<\/a>. Their housing wealth grew about $2.5 trillion between 2020 and 2024, even after accounting for new mortgage debt, according to a Wall Street Journal analysis<\/a>. Those gains went mostly to people who bought early. Younger millennials are also more likely to carry student debt: 39% do, with a median balance of $30,000, against 27% of older millennials, according to NAR.<\/p>\n

\u201cThe housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in,\u201d NAR deputy chief economist Jessica Lautz said in April. Speaking to Fortune<\/a>, she put it more bluntly: \u201cIt becomes a renter versus an owner economic scenario.\u201d<\/p>\n

Why 2027 matters<\/p>\n

Goldman\u2019s weak 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 price relief, because the cost of borrowing is the barrier.<\/p>\n

Goldman sees some supply easing. It expects the homeowner vacancy rate to rise from 1.2% to 1.4% by the end of 2027, and it expects lock-in to fade gradually after that. It also cites weaker demand, with purchase-intention surveys falling sharply and reduced immigration slowing household formation.<\/p>\n

The upshot is a market where people who already own can stay put on cheap loans. People who don\u2019t yet own face high rates, little for sale and no sign that prices will fall enough to compensate. Erik Hembre, the Minneapolis Fed\u2019s lead author, cautioned against too much doom. \u201cIt\u2019s still true that most people, a majority of people, become homeowners at some point<\/a>,\u201d he said, though the data suggest \u201csome point\u201d is arriving later.<\/p>\n

A house has always come before the next steps, and those are sliding too. The median first-time homebuyer is now 40, the oldest on record, according to NAR\u2019s 2025 Profile of Home Buyers and Sellers.<\/p>\n

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<\/a> released in June. Birth rates for women in their early and late 20s hit record lows, while the rate for women 40 to 44 reached its highest level since 1965. The average first-time mother is now a record 27.6 years old, up from 21.4 in 1970, according to an analysis of federal data<\/a> by Bowling Green State University\u2019s National Center for Family & Marriage Research.<\/p>\n

Economists have tied those timelines together. A November 2025 working paper<\/a> by Benjamin Couillard, an economics doctoral candidate at the University of Toronto, estimates that rising housing costs account for 51% of the drop in the U.S. fertility rate between the 2000s and 2010s. An earlier 2014 paper in the Journal of Public Economics by Lisa Dettling and Melissa Kearney found that rising house prices lead to more births among homeowners and fewer among people who don\u2019t own. By their estimate, a $10,000 rise in home prices raises fertility 5% among owners and lowers it 2.4% among non-owners<\/p>\n

One generation, two balance sheets<\/p>\n

The longer consequence may be what the freeze does to the idea of a millennial generation at all. Wealth inside the cohort was already splitting faster than it did for the boomers. A 2023 study in the American Journal of Sociology<\/a> tracked about 12,000 Americans born in 1957\u201364 or 1980\u201384 and found that wealth inequality \u201cis much more pronounced among Millennials than it was for Boomers.\u201d 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, against 8.7% of boomers.<\/p>\n

Timing compounds. Urban Institute researchers Jung Hyun Choi and Laurie Goodman found<\/a> 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.<\/p>\n

Then comes the inheritance. Cerulli Associates projects<\/a> that $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. Children of homeowners are already 7 to 8 percentage points more likely to own than children of renters, Choi\u2019s research found. The great wealth transfer will therefore flow along the same line Goldman\u2019s lock-in draws, toward the millennials whose parents owned.<\/p>\n

For marketers, pollsters and policymakers, \u201cmillennial\u201d is starting to describe a birth year more than a balance sheet. The generation needs new names. Perhaps it will come from Goldman\u2019s jargon: the Locked-In and the Locked-Out, or it could be Generation 3% and Generation 7%, after their mortgage rates. Perhaps they will be Generation Refi and Generation Rent. Stay tuned until after 2027, at least.<\/p>\n

Generative AI was used for research assistance and\/or transcription of this article. The reporter independently reported and verified the factual claims in this article, and a human editor reviewed it before publication.<\/p>\n","protected":false},"excerpt":{"rendered":"More than 95% of American mortgage borrowers pay less than today\u2019s market rate, and 65% pay at least…\n","protected":false},"author":2,"featured_media":660807,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60,2415],"class_list":["post-660806","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland","tag-millennials"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/660806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=660806"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/660806\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/660807"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=660806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=660806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=660806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}