Goldman Sachs stated that higher average mortgage rates in 2027 will depress U.S. home sales and reduce the issuance of agency mortgage-backed securities. In its base case scenario, mortgage rates fall to 6.4% by the end of 2027, but the full-year average is approximately 6.65%, still higher than in 2026.
The bank projects total agency mortgage bond issuance of $1.2 trillion and net issuance of $185 billion in 2027, both lower than the $1.3 trillion and $210 billion projected for 2026. Home loan issuance is projected at $875 billion, a slight decrease from 2026.
If the average mortgage rate remains at 7% in 2027, total agency mortgage bond issuance could further decline to $1.1 trillion, with net issuance falling to $165 billion. Goldman Sachs points out that persistently high interest rates represent a downside risk to the issuance forecast.
