You may be wondering if home prices are going to crash. And believe it or not, some people might even be hoping this happens so they can finally purchase a more affordable home. But experts agree that’s not what’s in the cards, and here’s why.

There are more people who want to buy a home than there are homes available to purchase. That’s what drives prices up.

Let’s break that down and explore why, nationally, home prices aren’t expected to come down anytime soon.

Prices Depend on Supply and Demand

The housing market works like any other market. When demand is high and supply is low, prices rise.

According to the latest estimates, the U.S. is facing a housing shortfall of several million homes. That means there are far more people looking to buy than there are homes for sale. This imbalance is the key reason prices aren’t falling on a national level.

“The main driving force on pricing is the limited amount of inventory in most markets across the country. That issue is not going to be solved overnight or in the next twelve months.”

How Did We Get Here?

For over 15 years, homebuilders haven’t built enough homes to keep up with buyer demand. After the 2008 housing crisis, construction slowed significantly and has only recently started to recover.

Even with recent gains, builders are still playing catch-up. According to AmericanProgress.org, construction is still not keeping up with today’s demand, let alone making up for years of underbuilding.

As long as this housing shortage continues, prices will likely remain steady or continue to rise in most markets.

What About Next Year?

Most experts agree that home prices will continue to rise next year, but at a slower, more sustainable pace.

It’s important to remember that home prices vary by location. National trends don’t always reflect what’s happening in your local market. In areas with more inventory, price growth may slow or even dip slightly. But in markets where supply remains tight, prices will likely continue climbing.

That’s why working with a local real estate expert matters. They can help you understand what’s happening in your specific market and guide your next steps.

Bottom Line

If you’re wondering what it would take for home prices to come down, it all comes back to supply and demand. With inventory still limited, prices are likely to remain steady or continue rising.

Let’s connect so you can better understand what’s happening in your local market and make a plan that works for you.