With sales falling to their lowest levels in 16 years, the housing market in America is on the verge of collapse and serves as a sobering reminder of the catastrophic 2009 crash. Even experienced investors are becoming uneasy as economic indicators flash warning signs, putting homeowners who bought during the recent boom at risk of financial ruin.
Housing Market in Freefall
Existing home sales have crashed to levels not seen since the Great Recession, with May 2025 marking the slowest sales pace since 2009. The median home price has skyrocketed by 52% since May 2019, while wages have increased by only 30%, creating an unsustainable gap between what Americans earn and the cost of homes.
Warning about housing market mega crash as dark omen summons ghosts of 2009… take these experts' advice before you're dragged under https://t.co/B0Bl1TgHsk
— Daily Mail US (@Daily_MailUS) July 3, 2025
Monthly mortgage payments have doubled from $1,000 pre-COVID to $2,000 now, pricing millions of hardworking Americans out of the market entirely. An alarming oversupply situation has developed, particularly in the West and South regions, with 34% more sellers than buyers creating a dangerous imbalance that threatens to accelerate price declines.
Florida and Arizona at the Highest Risk
Several metro areas in Florida and Arizona have been identified as facing the highest risk of a housing market crash in 2025, threatening the retirement dreams of many conservative Americans. The condo market is already in serious trouble, with sales plunging 10% from last year and an overwhelming 83% more sellers than buyers, creating a perfect storm for rapid price deflation.
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A modest correction is possible — but a crash?
The data says it’s very unlikely. ✅📈 pic.twitter.com/5sBkLruVQW
— BiggerPockets (@BiggerPockets) July 3, 2025
Experts warn that the current situation mirrors previous market crashes, with excessive optimism and the dangerous belief that “this time is different” setting the stage for financial pain. Historical patterns indicate that severe market corrections often follow euphoric highs, driven by inflated valuations and over-leverage, as we’re seeing today across housing markets that once seemed invincible.
Protecting Your Family’s Financial Future
Lawrence Yun, a leading housing economist, confirms the market disruption, stating: “That doubling in the monthly payment for a new set of buyers is hindering the market condition.” Sellers are now being advised to lower prices for quicker sales, as buyers currently have an advantage in many regions where inventory is stacking up rapidly.
“If mortgage rates decrease in the second half of this year, expect home sales across the country to increase due to strong income growth, healthy inventory, and a record-high number of jobs,” said Jeff Lichtenstein, trying to find optimism in a bleak situation.
The COVID-19 crash of 2020 demonstrated how quickly markets can collapse when economic uncertainty takes hold, and today’s buyers remain extremely cautious. The Crash of 1929 led to a devastating 90% market loss by 1932, resulting in the Great Depression, while the 2008 Financial Crisis was triggered by mortgage defaults and led to global economic pain – historical lessons that today’s homeowners would be wise to heed.
Sources:
https://www.investopedia.com/when-stocks-soared-right-before-crashes-11732553
https://www.dailymail.co.uk/real-estate/article-14840147/key-housing-indicator-plunges.html