Between 2005 and 2007, the U.S. housing market experienced a significant boom before home values plummeted, leading to severe economic repercussions. Today, concerns over a potential housing market crash have resurfaced due to elevated mortgage rates and fears of a recession, with financial services company Bankrate reporting a 33% chance of a downturn. However, most real estate experts believe a crash is unlikely. This is because the current market still has low inventory levels, lending standards are stringent, and foreclosure activity remains low.Even if prices do fall, the decline will not be as severe as the one experienced during the Great Recession. One obvious difference between now and then is that homeowners’ personal balance sheets are much stronger today than they were 15 years ago. The typical homeowner with a mortgage has stellar credit, a ton of home equity and a fixed-rate mortgage locked in at a low rate — in fact, a New York Times analysis from April found that, at the end of 2023, around 70 percent of U.S. mortgage holders were locked in at rates more than three percentage points below the current market rate at the time.Read more
