The Current Housing Market Is Steady and Not Crashing

If you have seen headlines or social posts calling for a housing crash, it is easy to wonder what is really happening with the current housing market and if home values are about to take a hit. But here is the simple truth: the data does not point to a crash. It points to slow, continued growth. And sure, it is going to vary by local area. Some markets will see prices rise more than others, and some may even see small, short-term declines. But the big picture is clear: the current housing market is expected to stay steady, with home prices continuing to rise nationally over the next five years.

The Real Story Is in the Expert Forecasts

In the Home Price Expectations Survey (HPES) from Fannie Mae, each quarter over 100 leading housing market experts weigh in on where they project home prices will go from here. And in the report that was just released, the experts agree prices are projected to climb nationally through at least 2029 (see graph below):

Here is how to read this visual. Each bar in that graph shows an increase, not a loss. The anticipated pace of appreciation simply varies from year to year. To better understand what this means for the current housing market, let’s look at another view of where prices are now and where they are expected to go next. In this version, the expert forecasts are broken into three categories: the overall average, the most optimistic projections, and the most pessimistic projections (see chart below).

Notice how even the most pessimistic forecasters say we’ll see prices rise by almost 5% over the next few years.

• Overall, prices are expected to rise about 15% from now through the end of 2029.
• The optimists say we’ll beat that and see a roughly 26% increase.
• And even the pessimists anticipate prices will go up by 5% during that period.

What sticks out the most? None of these groups who study the market are forecasting a crash, or even a decline, over the next 5 years.

How This Compares to “Normal” for the Market

Now, focus back on the first graph. The projections call for 2 to 3.5 percent price increases in each of the next five years. For context, the average rate of appreciation for the last 25 years was closer to 4 to 5 percent annually. While that is slightly below the historical average, it is much more sustainable and typical than where the current housing market was in 2020, 2021, and 2022.

Back then, prices rose too much, too fast based on record-low supply and record-high demand. Some areas even saw prices climb by 15 to 20 percent. So while it may feel like prices are stalling compared to those pandemic-era surges, what is really happening is that the current housing market is finally finding balance again.

Why Prices Aren’t Expected To Crash

A lot of the chatter about home prices today is based on that rapid rise and the old saying that what goes up, must come down. But historically, that’s not really true. Home prices almost always rise. And the main reason we’re not heading for a repeat of 2008 is simple: supply and demand. Even though affordability challenges have made it harder for some people to buy over the past few years, there still aren’t enough homes for everyone who wants one. And that ongoing shortage is keeping upward pressure on prices nationally.

That’s why experts across the board can confidently agree: we’re not headed for a price collapse, but for steady, long-term appreciation. And just in case it’s the economy that’s got you worried, remember this. Over the past 50 years, there have been plenty of economic events that have impacted the market. And one thing that’s consistently been true throughout time is the housing market always recovers. And we’re coming through that turn right now and going into a recovery.

Bottom Line

If you have been waiting to buy or sell because you are worried about a crash, it is time to look at the data, not the headlines. The current housing market is steady, not crashing, and the question is not if home prices will rise but by how much. Let’s connect so you can understand what is happening locally and what it means for your next move.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Jess & Co. Real Estate, LLC does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Jess & Co. Real Estate, LLC will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.