Expecting a Housing Market Crash? Here's What Experts Are Forecasting

One of the main reasons many buyers are still waiting is because they expect home prices to decline.

• Some are convinced a market correction or crash is on the horizon and believe they'll find better opportunities by delaying their purchase.
• Others are concerned about buying today only to see their home's value decrease in the future.

The result? Many prospective buyers remain on the sidelines, waiting for prices to move in their favor.

But what if the price drop you're waiting for never happens?

That's exactly what the latest forecasts are indicating.

Experts Aren't Predicting a Housing Market Crash

There's no shortage of headlines suggesting home prices are about to tumble. And while some regions are seeing slight price softening, that's very different from the widespread collapse many people are expecting.

A few local markets adjusting doesn't mean the entire country's housing market is headed for a crash.

While a few markets are experiencing modest price corrections, the broader picture tells a different story. According to Realtor.com, home prices are still increasing in 71% of housing markets nationwide.

The challenge is that headlines tend to focus on the exceptions rather than the rule. Stories about declining prices naturally attract more attention, so a small number of cooling markets often receive far more coverage than the majority of markets where values continue to rise.

That's why so many buyers come away thinking home prices are falling across the board when the reality is much more nuanced.

Instead of relying on headlines, it's important to look at what housing experts are actually forecasting. One of the most respected sources for that is Fannie Mae's Home Price Expectations Survey (HPES), which gathers projections from economists, housing analysts, and market experts to provide a clearer picture of where home prices may be headed.

Experts Expect Home Prices to Continue Rising Over the Next Five Years

Each quarter, more than 100 economists, housing professionals, and market analysts share their outlook on home prices using the most current economic and housing market data available.

And despite all the uncertainty in today’s market, there’s one thing they largely agreed on:

Despite the uncertainty surrounding today's housing market, there’s one point where these experts are largely in agreement:

They are not forecasting a housing crash.

In fact, when their projections are combined, the consensus is that home prices will continue to appreciate each year over at least the next five years (see graph below).

The key takeaway is that most experts aren't expecting home prices to decline. Instead, they're forecasting continued appreciation, just at a more sustainable and historically normal rate than we've seen in recent years. And if you're skeptical of those projections, it's worth noting that the survey isn't made up solely of bullish voices. It includes a wide range of perspectives, including analysts with more cautious and conservative outlooks on the housing market.

Even the Most Cautious Experts Aren't Forecasting a Crash

Researchers grouped the experts according to their outlook on housing, from the most optimistic to the most cautious. What's notable is that even the most skeptical group still expects home prices to rise over the next five years.

The optimistic camp forecasts price growth of roughly 4% annually, while the more cautious experts anticipate growth closer to 1% per year. Ultimately, the market will likely settle somewhere between those projections.

While every local market is different, these forecasts provide a useful national perspective. And according to that outlook, the bigger risk may not be a housing crash—it's waiting for one that never arrives.

If home prices continue to appreciate as projected, buyers who stay on the sidelines could miss out on substantial equity gains. In practical terms, a $400,000 home today could cost nearly $40,000 more in five years, meaning the cost of waiting may be far greater than many buyers realize.

Bottom Line

The housing crash many buyers are waiting for isn't what the experts are forecasting. Instead, most expect home prices to continue rising, albeit at a more moderate pace.

Because real estate is local, the best decision depends on your market, your timeline, and your goals. Before putting your plans on hold, talk with a local agent who can help you evaluate the opportunities and risks in your area so you can make an informed decision.

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