Do You Think the Housing Market’s About To Crash? Read This First

Do You Think the Housing Market’s About To Crash? Read This First

Lately, it seems like more and more people are asking the same thing: “Is the housing market about to crash?”

With attention-grabbing headlines all over social media and the news, it’s easy to see why there’s concern. In fact, data from Clever Real Estate shows that 70% of Americans are worried about a potential housing crash in 2025.

But before you pause your plans to buy or sell, take a moment to breathe. The truth is, the housing market isn’t crashing – it’s evolving. And that shift could actually benefit you.

Inventory Levels Are Keeping the Market Stable

Mark Fleming, Chief Economist at First American, puts it clearly:

“There’s just generally not enough supply. There are more people than housing inventory. It’s Econ 101.”

Think of it like this: when something’s in short supply – like concert tickets – prices rise. That’s what’s been happening in real estate. The limited supply of homes, paired with strong demand, continues to push home prices upward.

Just look at the white line in the 2025 section of the graph below. Even though inventory is increasing, data from Realtor.com shows we’re still far below normal levels (highlighted in gray):

The ongoing limited supply of homes is what’s preventing prices from dropping at a national level. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), puts it:

“… if there’s a shortage, prices simply cannot crash.”

More Inventory Brings More Moderate Price Growth

As additional homes come on the market, it helps ease the upward pressure on home prices – resulting in more balanced and sustainable price growth.

So while prices aren’t decreasing across the country, the increase in inventory is helping slow down the pace of appreciation. In other words, we’re seeing a moderation in price trends (see graph below):

And according to Freddie Mac, that moderation should 

Looking ahead through the rest of this year:

“In 2025, we expect the pace of house price appreciation to moderate from the levels seen in 2024, while still maintaining a positive trajectory.”

In simple terms, prices will keep rising in most places—but at a slower, more manageable pace. That’s welcome news if you’ve been struggling with affordability or feeling overwhelmed by the rapid increases we’ve seen recently.

Keep in mind, though, that what’s happening with home prices and inventory can vary from one market to another. That’s why it’s important to connect with a knowledgeable agent who can give you insight into what’s going on in your specific area.

Bottom Line

Don’t let the headlines shake your confidence. Experts overwhelmingly agree a housing crash isn’t on the horizon in 2025. As Business Insider puts it:

“. . . economists who study housing market conditions generally do not expect a crash in 2025 or beyond unless the economic outlook changes.”

What we’re seeing is a shift toward a more stable and balanced market—where price growth is steady and buyers have more options to choose from.

Let’s connect and talk about what’s happening locally and how you can take advantage of the current market conditions.