Is the Housing Market About to Crash? Here’s the Truth.

There’s a lot of noise circulating about the housing market right now. If your friends, colleagues, or clients are saying things like “I think prices are about to crash,” you’re not alone. That fear is spreading, but it’s important to understand that it’s not based on the actual economic data.

Here’s the truth: Home prices aren’t crashing. They’re moderating. And that’s a key difference between a bubble and a healthy, slowing market.

A recent survey showed that as many as 70 percent of Americans believe a housing crash is coming soon. That kind of widespread belief creates hesitation, leading people to hold off on buying or selling out of fear. But when we look at the core fundamentals of the market, the story is much more grounded.

Why a Crash Is Not Imminent (The Inventory Factor)

While interest rates have shifted activity, the real defense against a market crash is supply.

Inventory has gone up compared to last year, which is good news for buyers who’ve been waiting for more options. But—and this is the critical point—we are still about 20 percent below pre-pandemic inventory levels nationwide.

In real estate economics, low inventory means one thing: Prices can’t crash when supply is limited. That’s just basic economics.

Lawrence Yun, Chief Economist at the National Association of Realtors, said it best:

“There is just not enough supply. Prices simply cannot crash.”

Even major forecasters like Freddie Mac expect home prices to keep climbing this year, though at a slower pace. And that’s actually a positive sign. Steady, sustainable growth builds long-term confidence and keeps the market healthy.

Three Key Takeaways for Buyers and Sellers

If you hear someone say they’re waiting for a crash before making a move, here are three things you can share with them to provide clarity:

  1. Inventory is still too low for a major, widespread drop in home prices.
  2. Home values are rising at a more manageable, stable pace, which is a sign of a normalizing, healthy market, not a declining one.
  3. Now is still a smart time to buy or sell—especially for those thinking long term and focusing on life goals rather than short-term rate fluctuations.

Bottom line? Fear-based decisions rarely win in real estate. Clarity, data, and long-term vision always come out on top.