Q: Monty, we own a home and are thinking of upgrading to a larger home. I say thinking, because there is recent history of bubbles, and now with global dissension and wars, are we on the bubble?
Your caution is well-placed, but the picture is more nuanced than headlines suggest. Let me offer you the data, and economists do not see a 2008-style crash ahead. Housing analyst and CEO Hoby Hanna of Howard Hanna Real Estate Services summarizes the current consensus: “Today’s housing environment is fundamentally different from 2008. Homeowners have record levels of equity, lending standards are sound, and inventory remains constrained.” That said, there are legitimate stress signals worth understanding before you commit.
A: As of late 2025, the national housing supply stood at 4.4 months, well below the 6-month threshold considered a balanced market, and far from the 13-month glut that preceded the 2008 collapse. Simultaneously, 69 of the largest 100 metro areas are currently overvalued, meaning prices exceed their long-term fundamentals by more than 10%, according to Cotality’s Market Condition Indicators.
The bear case deserves a hearing. Housing analyst Melody Wright warns that the gap between median home prices ($410,800 in Q2 2025) and what a household needs to earn to afford that home ($118,530 annually) against a median income of just $83,730 is historically unsustainable. J.P. Morgan Research projects home prices to stall nationally at 0% in 2026, with West Coast and Sun Belt markets seeing actual declines due to post-pandemic construction oversupply.
Geography matters enormously. Cotality’s chief economist notes a “two-speed” market: high-cost coastal and Sun Belt regions are correcting, while the Midwest and Northeast remain resilient due to relative affordability and stable employment, according to Morningstar.
Your Three Options
Option 1: Move now, structure carefully. If your target market is in the Midwest or Northeast, current conditions likely favor you as a seller while still offering negotiating leverage as a buyer. Price your current home accurately from day one. Overpricing in a flattening market is a costly mistake.
Option 2: Wait 12 to 18 months and watch three indicators. Track your local months-of-supply monthly (aim for under five months before listing), monitor whether mortgage rates drop below 6%, and watch your employer’s sector for any headwinds. Freddie Mac projects mortgage rates averaging around 5.43% on 15-year fixed products in 2026 – a meaningful improvement in affordability if it holds.
Option 3: Upgrade contingent on selling first. In a flattening market, carrying two mortgages simultaneously is a financial stress test few households should voluntarily take. A contingent sale offer is weaker, but it is far safer than being overextended if values soften in your market.
The Global Wildcard
You are right to factor in geopolitical risk. Wars, trade disruptions, and tariff volatility can trigger recessions that housing markets do not escape. The honest answer is that nobody can reliably predict the timing. What you can control is your financial cushion and your transaction structure.
Whatever path you choose, consider using a transaction management platform like Propbox to ensure full process transparency and reduce the likelihood of surprises at closing.
