With recent chatter about the economy and concerns about a possible recession, some may worry about a housing market crash. However, there’s no need for panic as the market is not set up for a crash. One major reason is that the demand for homes is currently higher than the available supply. In contrast to 2008, when there was an oversupply of homes leading to a market collapse, today’s market only has 4.2 months of supply. This imbalance between supply and demand helps keep home prices steady or rising, which is the opposite of what happens during a crash. While some areas may experience slight price declines, the overall market continues to face a shortage of homes, making a large-scale price drop unlikely.
Another key factor is the low unemployment rate. During the 2008 financial crisis, high unemployment led to foreclosures and forced sales, contributing to the housing crash. Today, unemployment remains much lower at 4.1%, meaning people are able to make their mortgage payments, reducing the risk of widespread foreclosures. With strong employment and ongoing demand for homes, the housing market remains stable. While it’s understandable to have concerns during economic uncertainty, experts agree that the current market is far stronger than in 2008, making a crash highly unlikely.
