Will the Housing Market Crash?

The notion of falling mortgage applications should likely spark the same question for many hopeful homebuyers: Will this push home prices down?

Well, probably not. Mortgage applications overall have been down for much of the past year with interest rates as high as they are. This has, unfortunately, had little effect on home prices, which seem to rise regardless of the conditions surrounding housing demand.

Largely attributable to the limited inventory of available homes for sale, U.S. home prices have climbed 4.6% from March 2023 to March 2024, per Zillow’s Home Value Index. Bizarrely, home prices also jumped 1.1% just from February to March this year.

Even despite falling demand and historically high mortgage rates, home prices simply aren’t responding. As such, the likelihood of a housing market crash isn’t quite as palpable as some may hope.