Episode summary
Is the Housing Market About to Crash?
Biggerpockets
· · Hosts: Dave
Summary
The host argues that a housing crash is not imminent because the market does not yet show the kind of supply-and-demand imbalance that drove 2008. He frames crashes as needing either a sharp rise in supply, a steep drop in demand, or both, and says the current setup looks more like a “great stall” than a meltdown.
On demand, the host points to weaker pending sales and softer mortgage purchase applications, but says the decline is not a freefall. He notes that buyers remain highly mortgage-rate sensitive, with activity improving when rates moved back into the low 7s. That means demand has weakened, but not enough by itself to imply a crash.
On supply, the host expects new listings to stay constrained because sellers are reluctant to give up low existing mortgage rates, while active inventory may rise as homes sit longer. He also compares today with 2008 and says delinquencies, foreclosures, and credit quality are still far healthier than during the financial crisis. The biggest risk he sees is a labor-market deterioration that could lift unemployment and force more distressed selling.
Key takeaways
- The host says pending sales fell in September 11% year-over-year and 7% month over month, but not enough to signal a collapse on its own.
- The host expects lower new listings because mortgage-rate lock-in is keeping would-be sellers off the market.
- The host says active inventory may rise as homes sit longer, which could pressure prices without causing a crash.
- The host sees delinquency rates at 3.53 nationally as far below 2008 levels and still below 2019, reducing the chance of forced selling.
- The host says subprime lending is basically gone and most borrowers now have credit scores of 760 or better, unlike before the financial crisis.
- The host puts the probability of a 2026 housing crash at about 10% at most and says flat prices are the most likely outcome.
Notable quotes
“crashes can happen. They do obviously happen and they do when either supply or demand or both get a little bit out of whack”
“we're most likely going to see yes lower pending sales and lower demand than we had a year ago”
“I do think that second category of active listings is going to go up”
“the probability of a crash in 2026 remains very low”
Topics
- housing market crash
- housing demand
- housing supply
- 2008 financial crisis
- mortgage delinquency
Watch the episode
Watch “Is the Housing Market About to Crash?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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