Two-Thirds of Americans Expect the Housing Market to Crash, but Experts Say It's Unlikely

The days of double-digit price increases on a limited supply of for-sale homes may finally be over, and as a market correction leads to more frequent price drops in overheated metros, 67% of Americans now fear a housing market crash “is imminent within the next three years,” NerdWallet’s annual homebuyer report revealed. Home prices fell on a year-over-year basis in 18 of the 50 most populous U.S. metro areas, led by a 10.1% annual drop in sale prices in San Francisco, a 6.7% decline in San Jose, Calif., and a 5.5% reduction in Austin, Texas, MarketWatch reports.

Still, a recent report from Redfin revealed that for the four weeks ending Jan. 15, the median price of a house sold in the U.S. was up 0.9% year-over-year to $350,250. While a market correction could bring about big changes for the real estate sector in the year ahead, experts say that as long as prices remain stable, a crash isn’t likely.

The fears are understandable, but unlikely, the report added. Home prices have already begun to fall in some cities, “but a drop in home prices isn’t necessarily a crash,” said Holden Lewis, home and mortgages expert at NerdWallet. 

The biggest three reasons given were because of a worsening economy, due to higher mortgage rates, and because of high home prices.

The gloomy economic outlook, from layoffs in the tech and financial sectors to widespread conversations about a recession, is preventing some people from buying homes.

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