The U.S. housing market over the past 20 years

The 2008–2009 financial crisis, rooted in the collapse of the subprime mortgage market, exposed systematic flaws leading to over 3 million foreclosures, a severe credit crunch, and plummeting home values. Congress met the moment with the passage of laws designed to promote better mortgage underwriting and protect consumers.

In the decade that followed, the U.S. housing market recovered aided by the Worker, Homeownership and Business Assistance Act of 2009 which provided an $8,000 tax credit to first-time homebuyers and a $6,500 credit for homebuyers who lived in their current homes at least five years, as well as the Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) designed to help people avoid foreclosure and refinance underwater mortgages.

By the mid-2010s, housing values in many regions had returned to – or exceeded – pre-crisis levels. Tighter lending regulations, low interest rates, and renewed demand helped stabilize prices. New construction also picked up, though inventory remained constrained in some high-demand areas across the country.

Then came COVID-19 and 2020 saw a housing market jolted by lockdowns and job losses. Again, Congress responded swiftly with stimulus measures, including the CARES Act (2020), which introduced mortgage forbearance protections and eviction moratoriums.

Once again, the U.S housing market rebounded with a surprising boom emerging by mid-2020.

Historically low interest rates and remote work trends sparked demand, pushing home prices to record highs – with some markets seeing double-digit annual increases through 2022. But this rapid growth strained affordability and by 2022, policymakers faced a new challenge: rising inflation. The Fed raised interest rates to tame inflation, but this had a cooling effect on home sales in many markets.