Asking when will the real estate market crash? Get expert insights on the 2025 forecast, the factors that could trigger a downturn, and why a full crash is considered unlikely.

Economists See Price Growth, Not a Crash, in 2025

For many hopeful homebuyers, the pressing question is when will the real estate market crash to improve affordability. However, most economic forecasts for 2025 do not predict a crash. Instead, leading industry groups anticipate a continued, though more moderate, rise in home prices.

Major institutions like Fannie Mae and the National Association of Realtors project home price increases of 1% to 4% in 2025. This outlook is primarily due to a persistent housing shortage across the nation, with estimates suggesting the U.S. is millions of homes short of a healthy supply. This fundamental lack of inventory creates a floor under prices, making a dramatic collapse unlikely in the near term.

Understanding What Triggers a Market Crash

To understand when will the real estate market crash, it’s important to know the common triggers. A true crash typically requires a severe economic imbalance. The two main catalysts are a sudden, massive surge in unemployment that destroys buyer demand, or a rapid oversupply of homes due to overbuilding and a wave of foreclosures.

The conditions that caused the last major crash in 2008 don’t exist today. Lenders now enforce stricter standards, and most homeowners hold strong equity, which cushions them from a downturn. Some local markets may see slight price drops, but experts don’t expect a nationwide crash.

Preparing for Market Shifts Instead of a Crash

Instead of waiting for a crash that may never come, experts advise buyers to take control — improve credit, save for a larger down payment, and explore more affordable neighborhoods. Those wondering when the real estate market will crash to time their purchase should focus on being financially ready to act when the right opportunity appears.

When did the real estate market crash last?

The last major U.S. real estate market crash occurred in 2008, leading to the Great Recession. Lax lending standards, a speculative bubble, and a surge in foreclosures created the perfect storm that caused the crisis.

Is a real estate market crash predicted for 2025?

Most major economists and housing analysts do not predict a real estate market crash for 2025. Experts expect slower price growth or minor corrections in some areas, but not a nationwide crash.

What would have to happen for the real estate market to crash?

A real estate market crash likely happens when a severe economic recession causes mass job losses, home supply surges suddenly, or mortgage rates rise sharply.