Nationally, the number of people selling homes outnumber those buying them, home values are declining and mortgage rates are high.
On the surface, these look a lot like the conditions that preceded the 2008 housing crisis, but economists say things are different now.
Back in the early 2000s, the U.S. experienced a housing boom. Interest rates were low and home values spiked. Financial institutions loosened lending standards to expand the pool of potential home buyers, and it became easier for people to take out large loans for houses. The idea was that owning a home was a surefire way to build wealth. Instead, many homeowners accrued debt by refinancing their home to keep up with payments or having adjustable-rate mortgages, in which the interest rate changes based on market conditions, according to the Federal Deposit Insurance Corporation.
“It was very easy to get financing on a home, and it was very easy, arguably, to get too much financing on a home,” said Mike Gallmeyer, a professor at the University of Virginia’s McIntyre School of Commerce. “It was a situation where the market had to behave in a particular way that they would be able to continue to make their house payments.”
Then, the housing market slowed in 2006. Interest rates increased and home values decreased. The combination made it difficult for homeowners to make mortgage payments and many defaulted on their loans as a result. This turned the housing boom into a bubble that burst in 2007, according to the FDIC’s history of the crisis.
Fast-forward to 2026 and similar trends are showing up, coupled with economic uncertainty and a mounting affordability crisis. Redfin reported in March home sellers nationwide outnumbered buyers by nearly 47%, which was the largest gap since 2013. Mortgage rates remain high. Zillow reported home values are decreasing from COVID-19 pandemic levels.
But this doesn’t mean another housing crash like in 2008 is on the horizon, said Nikki Johnson, regional economist at the Hampton Roads Planning District Commission.
“These are very different times and very different conditions,” she said.
The financial system today doesn’t have the same weaknesses it did decades ago, Johnson said.
Lending standards are stricter, which means it isn’t as easy for people to get loans they can’t afford. And most mortgages now are fixed-rate, which means the interest rate is less vulnerable to market changes.
And those national trends, including the large gap between sellers and buyers and declining home prices, aren’t applicable everywhere like during the 2008 crisis.
Johnson pointed out housing costs in Hampton Roads are actually increasing and home sellers outnumber buyers by a more modest margin of 6%. And while rent costs are decreasing nationwide, they’re increasing in Hampton Roads.
“For Hampton Roads, the risks are in the opposite direction,” she said. “We have an insufficient supply that's really not meeting demand, and so our concern is whether the affordability pressures from high rent growth is really pricing out working households faster than wages can catch up.”
The largest gaps between home sellers and buyers are in southern metros that saw a lot of population growth during the COVID-19 pandemic, said Gallmeyer, who’s also the interim academic director of the White Ruffin Byron Center for Real Estate at UVA.
Cities in states like Texas and Tennessee built more housing to meet growing demand. But with high mortgage rates and ongoing economic uncertainty, fewer people are buying homes and home prices are dropping, Johnson said.
“That really reflects more likely a market recalibrating than any type of systemic failure,” she said.
And the consequences on homeowners aren’t as dire as they were in 2008, she said.
“Today's sellers in these heavy buyer markets might get less than they hope for, but they aren't defaulting because they owe more than the home is worth,” Johnson said. “Even if prices are falling sharply, the loans underlying today's mortgage securities are far higher quality.”
Homeowners also have equity in their homes, unlike in 2008, she added. Even though home values are softening in some places, homes are still worth more than most homeowners paid years ago, according to Zillow.
This means more people have a choice, Gallmeyer said. People are choosing to stay put so they don’t trade their lower mortgage rate for a higher one – a luxury homeowners didn’t have in 2008 when they couldn’t make their mortgage payments.
“One of the things that happened in 2008 was people ended up with loans they probably shouldn't have had, and then there was no way out,” he said. “It's much more comfortable when you're in a financial situation where you can sit there and you can really say, ‘I can choose my own adventure here.’”
In Hampton Roads, that adventure is limited by limited housing options. Johnson said construction on new homes slowed during the 2008 crisis, and the region hasn’t been able to catch up since.
