In recent months, the U.S. housing market has taken a sharp and unsettling turn.
Across the country, prospective buyers are backing out of deals, realtors are hitting pause on aggressive selling strategies, and industry insiders are bracing for what some believe could be the biggest market correction since the infamous 2008 financial crash.
According to a Redfin report published in March 2025, nearly 17% of all home purchase agreements in major U.S. markets were canceled in February alone.
That’s one of the highest rates since the height of pandemic-era uncertainty in 2020.
“Buyers are getting cold feet,” says Redfin’s Chief Economist Daryl Fairweather. “They’re seeing high interest rates, stagnant wages, and signs of overvaluation—and they’re walking away.”
Business Insider echoed these sentiments, citing a growing number of buyers who are actively choosing to rent instead of purchase, anticipating a significant market correction.
One realtor from Phoenix told the publication, “People are sitting on the sidelines. They think a crash is coming, and they want blood in the streets before they make a move.”
Seasoned real estate agents are increasingly comparing current conditions to those preceding the 2008 housing collapse.
In a recent CNBC segment, Florida-based realtor Linda Sells called it “eerily similar,” noting that speculative investors are pulling back, mortgage defaults are slowly ticking up, and over-leveraged homeowners are struggling to sell at the prices they paid just a year or two ago.
Even The Wall Street Journal published a feature last week detailing how realtors are advising clients to wait for deep discounts—an odd but telling reversal of the typical sales pitch.
“We’re in wait-and-see mode,” one Dallas agent said. “We don’t want buyers jumping in now and catching a falling knife.”
As reported by Bloomberg, average 30-year mortgage rates have hovered above 7% for over six months, compounding the affordability crisis. Combine that with inflated home prices and stagnant inventory growth, and many economists now warn that the market is due for a “significant reset.”
Mark Zandi, chief economist at Moody’s Analytics, told The Washington Post, “Home prices in many regions are detached from fundamentals. A correction is not only likely—it’s necessary.”
It’s not just homebuyers feeling jittery—large institutional investors are scaling down their real estate portfolios as well.
Reuters highlighted how Blackstone and other major firms have slowed down their acquisitions, citing risk and uncertain returns. “We’re not in buying mode,” said one investment manager. “We’re watching to see how much further prices fall.”
