Think Home Prices Will Crash? Here's What the Experts Actually Expect.

One of the biggest reasons buyers are still sitting on the sidelines is because they believe home prices are going to come down. Some think a crash is coming and they’ll get a better deal if they wait. Others worry they’ll buy now, only to watch their home’s value fall later. Nobody wants to overpay or buy right before prices drop. But there’s one important question worth asking:

What if the crash you’re waiting for isn’t actually coming?

Because the latest data suggests that may be the case.

Experts Are Not Calling for a Crash

If you’ve spent any time online lately, you’ve likely seen claims that home prices are about to come crashing down. And while it’s true that some markets are experiencing small price declines right now, that’s not the same thing as a nationwide housing crash. Some areas are going through a price adjustment, but Realtor.com data shows that home prices are still rising in 71% of housing markets across the country.

The challenge is that negative headlines tend to get more attention. So you’re seeing more coverage about the handful of markets experiencing declines than the majority that are still seeing prices rise. That can leave many buyers with the impression that prices are falling everywhere — when they’re not.

So how do you really know where prices are headed from here?

That’s where the Home Price Expectations Survey (HPES) from Fannie Mae comes in.

Home Prices Are Expected to Rise Over the Next 5 Years

Every quarter, more than 100 economists, housing experts, and market analysts are asked where they believe home prices are headed based on the latest available data. And despite the uncertainty in today’s market, they largely agree on one thing: They don’t think a crash is coming.

In fact, the average of all their forecasts shows home prices are expected to rise every year for at least the next five years (see graph below).



The bigger takeaway is that the overall expectation is not for home prices to fall. It’s for prices to continue increasing at a more normal pace.

And if you’re looking at the forecasts thinking, “Of course they’d say that,” it’s worth noting that this survey doesn’t only include optimists. It includes both optimistic and pessimistic viewpoints.

Even the Pessimists Aren’t Predicting a Crash

Researchers separated the panel into groups based on how bullish or bearish they were about the housing market. The result? Even the most pessimistic group still expects home prices to increase over the next five years.

Optimists believe prices could rise roughly 4% per year. Pessimists expect growth closer to 1% per year. The reality may land somewhere in the middle. Think about what that means: the debate among experts isn’t whether prices will crash. The debate is about how much prices will rise.

That’s a very different conversation than the one happening across social media.

Waiting Could Actually Cost You

If you’re delaying your move because you’re waiting for prices to drop, you may be disappointed. According to the experts, a widespread housing crash is not expected.

Based on the HPES forecast, a buyer who purchased a $400,000 home this January could gain nearly $40,000 in equity over the next five years from appreciation alone, even in this more moderate market (see below).



Of course, this depends on local market conditions. This forecast reflects a national average, not every individual market.

But broadly speaking, if the experts are right, the bigger risk may not be that prices crash. It may be waiting for a crash that never happens.

Depending on your market, waiting could mean missing out on nearly $40,000 in equity — or potentially paying $40,000 more in five years for the same home.

Bottom Line

Many buyers are waiting because they believe prices will fall, but that’s not what the experts are predicting.

If you’re trying to decide whether waiting still makes sense, let’s connect. Understanding what’s happening in your local market can help you make a decision that aligns with your goals.