July 23, 2025
If you’ve been waiting on the sidelines hoping for a housing crash to bring home prices back down to earth, don’t hold your breath. While the market has cooled slightly compared to the red-hot frenzy of the past few years, experts across the board agree: a full-blown housing crash isn’t coming.
Let’s break it down.
Prices Are High — and Still Rising in Most Places
Despite some recent softening in formerly overheated areas like Austin or parts of Florida, nationwide home prices are still breaking records. April 2025 saw a median home sale price of $414,000 — the highest ever recorded for that month by the National Association of Realtors. That’s nearly $130,000 more than just five years ago.
Even with 30-year mortgage rates hovering near 7%, home values continue to rise in regions where inventory remains tight. And that’s the key — inventory.
Low Inventory Is the Real Driver
We’re still deep in a supply-and-demand imbalance. There just aren’t enough homes to meet buyer demand, and that’s keeping prices high. Even though inventory has ticked up (a 4.4-month supply nationally as of April), it’s still short of the 5-6 months needed for a balanced market.
Many homeowners are hanging onto their properties, locked into low mortgage rates from prior years. Meanwhile, new construction hasn’t caught up. Between supply chain issues, rising material costs, and local zoning hurdles, builders are struggling to ramp up fast enough.
No Signs of a Crash — Just a Possible Slowdown
Unlike the Great Recession era, today’s market is underpinned by solid fundamentals:
We’re not dealing with the reckless lending or massive overbuilding we saw in the 2000s. That means while some regions may see prices flatten or dip slightly, we’re not looking at a nationwide price collapse.
What This Means for Buyers and Sellers
For buyers: Don't expect a fire sale. If you're waiting for prices to plummet, you may be waiting for a while. Focus instead on locking in a manageable mortgage rate and looking in markets where inventory is growing.
For sellers: Homes are taking a bit longer to sell, but if your property is priced right and marketed well, there’s still strong demand. Especially in the Northeast and Midwest, where construction is limited, price growth continues.
The Bottom Line
A crash? Highly unlikely. A cool-down? Already happening in certain areas. But with limited supply, strong demographics, and stricter lending, this market isn’t falling off a cliff.
Stay informed, stay strategic, and don’t buy into the fear.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
