Will Home Prices Crash? Here’s What You Need to Know

You might be wondering if home prices are going to crash, and you’re not alone. Some people are actually hoping for a drop to make purchasing more affordable. But according to the experts, that’s not what’s on the horizon. If you’re waiting for the market to suddenly collapse back to 2019 prices, here’s why that scenario is highly unlikely.

Why Supply and Demand Rule the Market

The core reason prices aren’t crashing is the fundamental imbalance between supply and demand.

Right now, there are simply more people looking to buy homes than there are homes available. Nationally, we’re facing a housing shortfall of millions of homes. As David Childers, President of Keeping Current Matters, says:

“The main driving force on pricing is the limited amount of inventory in most markets across the country. That issue is not going to be solved overnight or in the next twelve months.”

A crash requires an oversupply of inventory, and we are nowhere near that point.

How Did We Get Here? The Underbuilding Crisis

Why is supply so low? The current situation is the result of long-term trends:

For over 15 years, homebuilders haven’t been building enough homes to meet buyer demand. After the 2008 housing crisis, new construction slowed significantly and has only recently started to recover. But even with an uptick in construction, we’re still playing catch-up, and it’s not enough to make up for years of underbuilding.

The Outlook: Slower, Healthier Growth

Most experts predict home prices will keep rising, but at a slower, healthier pace. This moderation is good news, as it provides stability rather than another frantic boom.

It’s important to remember that local market conditions will vary. Some areas with more inventory might see prices level off or decline slightly, while others with tighter inventory will continue to see growth.

The truth is, until supply catches up with demand, home prices will likely remain steady or increase. Making your move based on facts, not the hope of a crash, is the smartest strategy.