Summary
Economists predict that any market correction will be modest and not on the scale of the Great Recession. Experts do not expect a housing market crash, due to low inventory, strict lending standards and other factors.
The median U.S. home price in September was $404,500. That’s down from the record high of $426,900 in June.
In September 2024, 19 percent of homes had foreclosure filings. President-elect Donald Trump has promised tax cuts. Mortgage rates will closely follow yields on the 10-year Treasury bonds.
Inventories have been growing but remain frustratingly tight. Not even high mortgage rates have slowed price appreciation. “You’re not going to see house prices decline,” says Rick Arvielo, head of mortgage firm New American Funding.
The numbers don’t represent a crash, but they do show a housing market coming back to earth. Even if prices do fall, the decline will not be as severe as the one experienced during the Great Recession.
Builders aren’t building quickly enough to meet demand. Demographic trends are creating new buyers: There’s strong demand for homes on many fronts.
Most homeowners have a comfortable equity cushion in their homes. Lenders weren’t filing default notices during the height of the pandemic. McBride says a plateauing of prices is more likely than a steep fall.
The current market doesn’t have enough available housing inventory to meet demand. Mortgage rates are high and sale prices are soaring. Fewer homebuyers can afford the purchase.
