US Housing Market Crash History
The US housing market experienced its most devastating crash during the 2008 subprime mortgage crisis, with national home prices falling 33% from peak to trough by 2012. The housing bubble was fueled by subprime lending, mortgage-backed securities, and speculative buying. Recovery took nearly a decade in many markets. Previous housing corrections occurred in the early 1990s and the 1980s savings and loan crisis, establishing a roughly 15-20 year cycle for major real estate downturns.
Current Housing Affordability Crisis
Today's real estate market faces critical affordability challenges with home price-to-income ratios at historic extremes exceeding 2006 bubble levels in many metros. The median home price now requires over 40% of median household income for mortgage payments. Additional stress factors include elevated mortgage rates above 7%, historically low inventory due to rate lock-in effects, and institutional investor competition reducing first-time buyer access.
Commercial Real Estate and Regional Risks
The commercial real estate sector faces particular stress in office properties due to remote work trends, with vacancy rates reaching 20% in major cities. Regional banking exposure to CRE loans creates systemic risk concerns. Climate change impacts are driving insurance company retreats from high-risk coastal and wildfire zones, creating localized market disruptions. Investors should monitor CMBS delinquency rates, office conversion trends, and regional bank earnings for early warning signals.