Consumers are increasingly concerned about a housing market that has stalled for many. Many buyers are still held back by soaring home prices and rising mortgage rates, while potential sellers are locked into low interest rates secured years ago and unsure whether they’ll find a buyer even if they list.
In just a few years, the market went from exuberant to frozen in some places.
Coupled with cost-of-living pressures, rising gas prices, and geopolitical uncertainty related to the Iran conflict, the anxiety begins to look more systemic. The result is a pervasive sense of insecurity that is shaping how consumers engage with the housing market.
One place it surfaces is in online search behavior. Google queries are certainly not a definitive measure of market health, but they can reveal in real time how buyers and sellers are thinking about their next actions and second guessing. And recently, one of the most searched phrases is “imminent housing collapse.”
To see how this concern translates more broadly, we looked at Google Trends data for the related term “housing collapse.”
Search interest in this term has waxed and waned over the past year, with notable spikes in April and November 2025. This period coincided with increased market uncertainty and interest rate volatility. However, a more recent development saw interest rates plummet in March 2026, even as mortgage rates continued to rise.
This disconnect suggests something more subtle than panic alone. That is, instead of a market gripped by constant fear, it is a market of waves of attention and fear, shaped by sentiment and headlines as much as by underlying fundamentals.
In the first article of this two-part series, we spoke with Dr. Lisa Sturtevant, Chief Economist at Bright MLS, about whether she believes a 2008-style housing crash is imminent and what she actually sees in the market.
Dr. Lisa Sturtevant | Bright MLS
this is not 2008
Despite a surge in online searches about a potential housing crash, the U.S. housing market is not headed for a 2008-style collapse. If anything, Sturtevant says, we are entering a more gradual adjustment phase.
“The short answer is no,” Mr. Sturtevant told Mr. Inman when asked if the market was headed for a crash similar to the housing crisis of the late 2000s. “The underlying factors that cause this kind of economic downturn are simply not in place at this point.”
The conditions that drove the housing crash nearly 20 years ago, such as excess inventory, risky lending practices and low homeowner equity, are largely absent today.
Sturtevant said that while inventory is increasing in some regions, inventory remains subdued in many markets. Lending standards are much stricter than in the subprime era, and homeowners have historically high levels of equity, cushioning them against foreclosure risk. Meanwhile, foreclosures remain below pre-pandemic levels.
“All of these things mean we’re not prepared for a fall-off-a-cliff scenario,” Sturtevant said.
The real story: gradual fixes
Rather than a crash, the housing market is undergoing what Sturtevant describes as a “gradual correction.” After years of rapid price increases, especially during the pandemic-era boom, home price growth is now slowing.
He said prices are already down year-over-year in some markets, particularly in Florida, Texas and parts of the Southwest, though typically in the single digits.
This change is part of a long-term realignment aimed at restoring affordability. “The goal is to get your monthly housing payment back up as your income grows,” Sturtevant said.
This adjustment is unlikely to occur soon. Sturtevant said the combination of slowing price growth, moderate price declines in some regions and modest income growth means this situation is likely to persist for several years.
Why are searches for “housing collapse” soaring?
If fundamentals don’t suggest a crash, why are consumers increasingly looking for one?The answer lies more in psychology than data.
A recent study by the National Endowment for Financial Education found that 88% of Americans are experiencing financial stress heading into 2026. 77% reported having stumbled financially in the past year, highlighting growing economic anxiety.
“When people are anxious, they look for answers,” Sturtevant said, likening online search behavior to self-diagnosing a medical condition with WebMD.
He noted that many buyers see similarities between today’s rapid rise in home prices and the situation before the 2008 crash, even though the underlying circumstances are very different. However, this fear is beginning to be reflected in actual market behavior.
“What we see from the data is that economic uncertainty is deterring buyers,” Sturtevant said. “In our monthly survey of agents, many report that they have paused their search for a buyer or backed out of a contract, primarily due to concerns about their financial situation and the economy as a whole. That anxiety is shaping how people interpret what is happening in the housing market.”
Discussion of imbalance between buyers and sellers
Recent data from Redfin suggesting that the number of sellers significantly outnumbers buyers adds to the perception that the market is weakening.
Redfin reported in March that the number of home sellers outnumbered buyers by an estimated 46.3% in February, a difference of approximately 629,808 people. This is the largest imbalance since Redfin began tracking the data in 2013, and sharply widened from the previous year’s 29.8 percent difference, when there were about 449,409 more sellers than buyers.
But Sturtevant cautioned against overinterpreting the data, noting that it relies heavily on online search activity and does not necessarily reflect actual purchase intent.
“I don’t think that methodology is very convincing,” she says. “Our data for markets from New Jersey to Virginia shows that inventory remains well below 2019 levels in many regions, particularly parts of Pennsylvania such as Philadelphia, and contracting activity continues to be strong.Sellers are not clearly outnumbering buyers in this market.”
Sturtevant said there are several areas where inventories have increased above pre-pandemic levels, including parts of the Washington, D.C., area and coastal markets. However, an important indicator that Bright MLS pays attention to is whether the number of new listings exceeds the number of new contracts. And at the moment, that’s only happening in a handful of markets.
“Online search data can be helpful, but it doesn’t necessarily reflect true buying and selling intent,” she says. “Rising mortgage rates and economic uncertainty are hindering that transition, but more broadly we are moving towards a more balanced market after a long journey in favor of sellers.”
Sturtevant added that it’s important to remember that most sellers are also buyers. “When you have more sellers, buyers are often right behind you,” she says. “It’s just harder to measure because they’re the same people, right?”
The market is cooling down, but it’s not a crisis
While the traditional “mortgage rate lock-in” effect, where homeowners are reluctant to sell to avoid low interest rates, has been widely discussed, Sturtevant said a new dynamic is emerging.
“What we’re seeing now is a new kind of lock-in effect driven by economic uncertainty, not just mortgage rates,” Sturtevant explained. “Rate fixing wasn’t as important a factor last fall; people were still willing to move due to other life considerations. However, if interest rates rise towards 7%, more homeowners may choose to stay put.”
Sturtevant said one of the biggest unknowns facing the housing market is geopolitical risk, particularly the ongoing conflict involving Iran. In the best-case scenario, where the dispute is quickly resolved, housing activity could simply be delayed, pushing the busy spring buying season into the end of the year.
However, a prolonged conflict could have more serious consequences. If mortgage rates rise to the 7% to 8% range, combined with rising gas prices and a weakening job market, housing activity could stall significantly.
“If all of this happens, it could have a huge impact on home buying and selling, and people could be literally frozen in place,” Sturtevant said.
Although headlines and search trends may suggest otherwise, the housing market is not on the brink of collapse. Rather, we are entering a slower, more complex phase shaped by affordability challenges, cautious consumers, and widespread economic uncertainty. For agents and brokers, that means navigating a market that feels calmer than in recent years but is far from crisis.
Email Nick Pipitone
