Currently Reading

Do Unsustainable Home Prices Mean a Market Crash is Underway?


Do Unsustainable Home Prices Mean a Market Crash is Underway?

May 3, 2021
House on Jenga
Photo: Romolo Tavani |

What goes up must come down, and for the current housing market, more consumers are concerned whether the fall will be a crash and burn. But just as the housing industry defied all odds at the onset of the pandemic, experts say to expect the unexpected. The current housing frenzy has reminded many of the housing bubble in the mid-2000s, but there is no reason to prepare for a similar crash, reports The reasoning for rising home prices and low inventory is increased demand. What may likely happen, according to, are increased prices for the next several years, but at a might slower pace.

But that doesn’t mean prices will return to their pre-pandemic levels. List prices are expected to continue rising to meet sale prices, but the annual increases won’t be nearly as brutal.

“There’s no way the double-digit price growth can continue long term,” says Chief Economist Danielle Hale.

The only way prices would drop by any significant amount would be if mortgage rates shot up substantially and a lot of homes flooded the market. Record-low rates have allowed buyers to purchase more expensive homes while keeping their monthly payments within their budgets. As rates rise, buyers won’t be able to afford the higher prices. Plus, an increase in inventory would give buyers more choices, meaning there would be less frenzied competition.

“As the pandemic winds down and the work-from-anywhere dynamic pulls back as office buildings reopen and interest rates normalize, that’s going to take the froth out of the market and may also result in corrections in some markets,” says Mark Zandi, chief economist at Moody’s Analytics.

Read More

Related Stories

Housing Markets

Colorado Homeowners See Dramatic Home Value Increases

During the first eight years of homeownership, one Colorado resident’s home increased in value modestly—it took just two years for the home’s…


What the Latest Economics Research Means for the Industry

On an aggregate basis, residential construction costs are up nearly 10%, says Robert Dietz, chief economist for the National Association of Home…


Construction Sector Hiring Slows as Builders Face Material Shortages

The construction sector gained more new workers than other industries, yet material shortages are causing bottlenecks for builders, limiting their…


More in Category


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.