If the housing market crashes, expect a rapid decline in home values, a rise in foreclosures and an oversupply of homes. However, most experts agree that a housing market crash in 2025 is unlikely, as many homeowners have built up significant home equity and housing stock is low. The issue is primarily an affordability crisis. High interest rates and inflated home values have made purchasing a home challenging for first-time home buyers. 

Declining mortgage rates will likely incentivize would-be buyers anxious to own a home to jump into the market. Expect this increased demand amid today’s tight housing supply to put upward pressure on home prices.

If you’re in a financial position to buy a home you plan to live in for the long term, it won’t matter when you buy it because you will live in it through economic highs and lows. However, if you are looking to buy real estate as a short-term investment, it will come with more risk if you buy at the height before a recession.