Is the Housing Market Going to Crash Like 2008?

One of the biggest questions I hear right now is: “Is the housing market going to crash like 2008?”

There is a lot of noise out there, so let’s separate fear from fundamentals. Could some markets correct or soften? Yes. But a 2008-style crash requires a very specific set of conditions, and today’s market looks meaningfully different.

1) This is not 2008 because lending is different

The 2008 era was defined by risky loan structures, weak verification, and a credit environment that allowed many borrowers to take on payments they could not sustain.

Today, ability-to-repay rules and qualified mortgage standards require lenders to verify a borrower’s ability to repay, and they largely eliminate the no-document style lending that helped fuel the last crisis. Source: https://files.consumerfinance.gov Consumer Financial Protection Bureau

That does not mean risk is zero, but it does mean the loan quality backdrop is stronger.

2) Homeowners have significant equity, which reduces forced selling

Crashes are often accelerated by forced selling. Equity matters because it gives homeowners options: sell, refinance, or restructure without immediately going underwater.

In Q3 2025, total homeowner equity for borrowers with a mortgage was reported at $17.1 trillion, and the average borrower still had about $299,000 in accumulated home equity. Source: https://www.cotality.com Cotality

High equity does not prevent every hardship, but it makes a broad wave of distressed selling less likely.

3) Inventory is still tight, and oversupply is usually the fuel for a big drop

Even with more homes coming to market, we are not in a surplus environment nationally. Without excess supply, it is harder to produce a major, fast price collapse.

The National Association of Realtors reported a 4.2-month supply of inventory in November 2025. Source: https://www.nar.realtor National Association of REALTORS®+1

That is not a market flooded with listings. It is a market that is gradually rebalancing.

4) Mortgage performance has remained relatively solid

Another ingredient in a crash is widespread payment failure. While some consumer credit categories have seen stress, serious mortgage delinquency measures remain low by historical standards.

For example, Fannie Mae reported a conventional single-family serious delinquency rate of 0.57% in November 2025. Source: https://www.fanniemae.com fanniemae.com

MBA’s National Delinquency Survey reported an overall mortgage delinquency rate of 3.99% in Q3 2025, which includes early-stage delinquencies. Source: https://www.mba.org MBA

5) Demand has not disappeared, buyers are just more strategic

Even with higher rates, there are large buyer cohorts still in the market. Many are not rushing, but they are buying with more intention.

NAR’s generational trends show millennials remain a meaningful share of recent buyers. Source: https://www.nar.realtor National Association of REALTORS®+1

The result: the market may cool in some places, but demand has not vanished.

So will prices correct?

Some markets may soften. Some price growth may slow. That is normal in a recalibrating market.

But a 2008-style crash is not the most likely scenario because the fundamentals look different: stricter lending, higher equity, tight inventory, and ongoing demand.

Bottom line

The market is not crashing. It is recalibrating.

And for buyers who understand the difference, that can create real opportunity through better choices, more negotiation room, and smarter timing.

If you want to walk through what’s really happening in your local market and what the numbers say for your situation, DM me and I’ll help you map it out.

Sources (general sites):
https://files.consumerfinance.gov Consumer Financial Protection Bureau
https://www.cotality.com Cotality
https://www.nar.realtor National Association of REALTORS®+1
https://www.fanniemae.com fanniemae.com
https://www.mba.org MBA