Will the Housing Market Crash? Here's Why Experts Say "No

by Krista Klause

Even if you didn’t own a home in 2008, you likely remember the housing crisis. Many now worry it could happen again. But rest easy—things are different this time. As Business Insider notes:

“Though many Americans believe the housing market is at risk of crashing, economists overwhelmingly do not expect a crash in 2024 or beyond.”

Here’s why experts are confident. For the market to crash, there would need to be too many houses for sale. Right now, there’s an undersupply, not an oversupply like in 2008. Housing supply comes from three main sources:

Existing Homes 🏠
New Constructions 🏗️
Distressed Properties 💔

Homeowners Deciding To Sell Their Houses

While existing home supply is up from last year, it’s still low overall. Nationally, the current supply is well below the norm and far below 2008 levels. The data shows we have only about a third of the available inventory today compared to then. This means there aren’t enough homes to cause values to drop.

New Home Construction

Concerns about overbuilding are unfounded. Builders have been cautious since the Great Recession, resulting in an ongoing home shortage. The gap from previous underbuilding is still being addressed.

Distressed Properties

Lending standards are much tighter now, leading to fewer foreclosures. The graph from ATTOM shows a significant drop in foreclosures since the housing crash. Recent upticks are minor and only relative to unusually low numbers from recent years.

What This Means for You

Inventory levels are too low for prices to drop significantly or for a market crash. As Forbes explains:

“The likelihood of a housing market crash remains low for 2024.”

Mark Fleming, Chief Economist at First American, emphasizes supply and demand:

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

Lawrence Yun, Chief Economist at NAR, adds:

“We will not have a repeat of the 2008–2012 housing market crash. There are no risky subprime mortgages or massive oversupply.”

Bottom Line

The market doesn’t have enough available homes for a repeat of the 2008 crisis. Housing experts and inventory data confirm there isn’t a crash on the horizon.

If you have questions or need guidance, connect with Krista Klause, your trusted realtor, to navigate today’s market with confidence! 🏡✨