Recently, it seems like many folks have been wondering, "Is the housing market on the verge of crashing?"

If you've been keeping up with social media or the news, you've probably noticed some alarming headlines. It's not shocking, then, that a report from Clever Real Estate found that 70% of Americans are concerned about a potential housing crash in 2025.

Before you reconsider your decision to buy or sell a home, just take a moment to breathe. The reality is that the housing market isn't going to crash; it’s simply evolving. And this change can actually be beneficial for you.

Today’s Inventory Keeps the Housing Market from Crashing

Mark Fleming, Chief Economist at First American, says:

““There’s just generally not enough supply. There are more people than housing inventory. It’s Econ 101.”
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— Mark Fleming, Chief Economist at First American

If you think about it, when there's a shortage of something—like tickets for a big concert—prices tend to rise. The same thing is happening with homes. We're still facing a supply shortage, and with more buyers than available homes, prices are being driven up.

Take a look at the white line for 2025 in the graph below. Even though the number of homes for sale is on the rise, data from Realtor.com indicates that we're still significantly below the usual levels, which are represented in gray.

The persistent low supply of homes is what’s preventing home prices from falling nationwide. As Lawrence Yun, Chief Economist at the National Association of Realtors, points out:

““… if there’s a shortage, prices simply cannot crash.”
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— Lawrence Yun, Chief Economist at the National Association of Realtors (NAR)

More Homes for Sale Means Price Growth Is Easing

As more homes hit the market, it eases some of the strong upward pressure on home prices, resulting in more balanced and sustainable price growth.

Prices aren't dropping across the country, but with more homes available, they aren't increasing as quickly either. What we're witnessing is a moderation in prices.

Freddie Mac suggests that this trend of moderation is expected to continue for the remainder of the 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.”
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— Freddie Mac

In simple terms, that means prices will keep rising in many areas, but not as rapidly as before. This is positive news for those who have struggled to find a home and felt overwhelmed by the quick price increases over the past few years.

Prices and inventory can really differ from one local market to another. It's best to chat with your agent to understand the situation in your area.

Bottom Line

Don't let the discussions around the housing market worry you. Experts are generally in agreement that a crash is unlikely to happen in 2025. As noted by Business Insider:

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

We're moving into a housing market that's more balanced and healthier, featuring slower price growth and increased opportunities.

Let’s discuss what’s going on in our local market and how you can take advantage of the opportunities.