For home prices to crash, there needs to be much more supply than demand.

“This claim accurately reflects the fundamental economic principle of supply and demand, which governs housing markets. A housing market crash is a rapid and significant drop in prices. According to economic theory and market analysis, prices fall when supply exceeds demand. A crash, being an extreme price drop, would therefore be associated with a situation where the supply of homes for sale vastly outstrips the number of willing and able buyers. Context: While a supply and demand imbalance is the core mechanism for a price crash, other economic factors often trigger this imbalance. These can include rising interest rates making homes unaffordable (reducing demand), a recession leading to job losses (reducing demand), or a wave of foreclosures (increasing supply).”