With ongoing discussions about the economy and the possibility of a recession, it’s understandable if you’re feeling anxious about the housing market. If you’ve been hearing concerns about a potential crash, rest assured—the market today is not set up for a repeat of 2008.

Here’s why you don’t need to worry about a crash in the housing market right now.

1. Strong Demand for Homes Outpaces Supply

One of the key reasons for the 2008 crash was an oversupply of homes. Today, we’re facing the opposite problem: there aren’t enough homes to meet the demand.

In a balanced market, there’s usually about a six-month supply of homes. That means if no new homes were listed, it would take six months to sell everything currently available. Back in 2008, supply shot up to 13 months—an oversupply that led to falling prices. But today’s market looks very different. Right now, we have just 4.2 months of supply, meaning demand is outstripping the number of homes available.

In most areas, this shortage keeps home prices stable or even pushes them higher. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains it clearly:

“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”

2. Unemployment Rates Remain Low

Another major factor in the 2008 crisis was high unemployment. When people lose their jobs, they can struggle to make mortgage payments, leading to foreclosures, which then flood the market with distressed properties. Today, however, the job market is much more stable.

During the 2008 crash, the unemployment rate hit 8.3%, which led to a wave of foreclosures. Now, unemployment is at just 4.1%—well below the long-term average of 5.7%. This means people are working, paying their mortgages, and staying in their homes. Plus, with more people employed, the demand for homes remains strong, further supporting home prices.

Today’s Market Is Different From 2008

While talk of economic uncertainty might stir up concerns, the conditions that led to the 2008 housing crisis simply aren’t present today. As Rick Sharga, Founder and CEO of CJ Patrick Company, puts it:

“Literally everything is different about today’s housing market dynamics than the conditions that led to the housing crisis.”

With demand exceeding supply and low unemployment keeping buyers in the market, the chances of a major crash are slim.

Bottom Line

The housing market is far more stable today than it was in 2008. That said, real estate is always local. If you have concerns about how the market is doing in our specific area, feel free to reach out. I’d be happy to help you understand the latest trends and how they might affect you.