Is the Housing Market Going to Crash?

Key takeaways Economists are confident that the housing market is not going to crash. Instead, it’s undergoing a correction that will likely take many years. Home prices have continued to climb even as sales activity has slowed, largely due to an inventory shortage – not a bubble waiting to burst. Lending standards are much stricter than they were before the Great Recession, reducing the risk of a credit-driven collapse. Even so, homebuyers and sellers are feeling the strain of an unaffordable housing market and volatile economy. Today, the housing market feels stuck. Buyers are frozen out by high prices and elevated mortgage rates. Sellers are hesitant to list because they don’t want to give up low-rate mortgages and worry they won’t find a buyer. As a result, sales are slow and price cuts are fairly common. Consumers are concerned about the state of the economy and how dramatically the market has flipped from hot to cold But most economists are confident that the economy is actually undergoing a long-term correction, not spiraling out of control. The last real estate crash in the U.S. happened during the Great Recession nearly two decades ago, when a housing bubble fueled by risk...