The Housing Market Is Stronger Than Most People Think

If you've been paying attention to real estate headlines recently, you've probably seen plenty of predictions suggesting the housing market is headed for trouble. Between higher mortgage rates, affordability challenges, and economic uncertainty, it's easy to assume that buying or selling a home right now may not be the best move.

However, when you look past the headlines and focus on the actual data, a much different picture emerges. While today's market looks very different from the extraordinary conditions we experienced in 2020 and 2021, that doesn't mean the market is weak. In fact, by historical standards, the housing market continues to demonstrate remarkable strength.

Homeowners Have More Equity Than Ever Before

One of the biggest reasons the housing market has remained stable is the strong financial position of today's homeowners. During the housing crisis of 2008, homeowner equity levels were much closer to mortgage debt, leaving many families with limited financial flexibility when market conditions changed.

Today, according to Federal Reserve data American homeowners collectively hold approximately $35 trillion in home equity—far exceeding the amount owed on mortgages nationwide. (see graph below):

This substantial equity cushion means that many homeowners aren't financially stretched thin. Instead, they have options. Whether they choose to sell, stay put, or purchase another property, they're generally making decisions from a position of financial strength rather than financial pressure.

Research from Realtor.com found that homeowners who have owned their homes for just five years have accumulated roughly $180,000 in equity on average. For those who have owned their homes for six to ten years, that figure climbs to more than $340,000.

Additionally, data from ATTOM and Census indicates that nearly two-thirds of homeowners either own their homes outright or have at least 50% equity.

For homeowners in markets like Prescott, Arizona, this accumulated equity continues to provide opportunities and flexibility that simply didn't exist during previous market downturns.

Low Mortgage Rates Continue To Keep Inventory Tight

Another major factor supporting today's housing market is the large number of homeowners who locked in historically low mortgage rates over the past several years. According to Federal Housing Finance Agency (FHFA) data, more than half of all active mortgages currently carry interest rates below 4% (see graph below): 



This financial stability is also reflected in the foreclosure numbers too. While foreclosure filings have increased slightly from historic lows, they remain well below long-term averages, according to ATTOM.
 
Homeowners today generally have substantial equity, greater financial flexibility, and more options than homeowners had during previous housing downturns. That's why we're not seeing widespread distress sales or a surge in foreclosures.

Home Prices Are Adjusting, Not Crashing

Another sign of a healthy market is what's happening with home prices. While price appreciation has slowed from the rapid pace experienced during the pandemic housing boom, values continue to rise in many parts of the country.

Recent research from Redfin shows that home prices nationally are still increasing, although at a more moderate pace of approximately 2% year over year (see graph below):


That slowdown is good news, as Daryl Fairweather, Chief Economist at Redfin, explains:

"We're in the middle of a long-term housing market correction, not a housing market crash. After the pandemic-era frenzy sent prices soaring and inventory to historic lows, the market needed a reset."

A slower pace of appreciation creates a healthier and more balanced environment for both buyers and sellers.

Final Thought

The housing market of 2026 is not the market of 2020, and it's certainly not the market of 2008. Strong homeowner equity, historically low foreclosure levels, and continued home price appreciation all point to a market that remains fundamentally sound.

For buyers and sellers in Prescott, Arizona, understanding local market conditions is more important than following national headlines. Waiting for a dramatic housing crash that many experts don't expect could mean missing opportunities to build equity and achieve long-term financial goals.

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