US housing prices are already falling and the setup looks worse than right before the 2008 crash, which is bad for sellers and homeowners but good for patient buyers willing to wait.

• The average US home sale price is down about 10% from the 2022 peak and still falling.
• The current moment looks like mid-2005, when the Fed publicly denied a housing bubble months before the crash.
• This time is worse because inflation is high and gas prices are strained, unlike in 2005.
• Luxury homes above $1.2 million are down 30-35% per square foot in some areas over the last three years.
• Inventory is piling up as more sellers try to get out, and Middle East conflict is keeping oil supply tight.

Outlook: Home prices likely keep dropping, with the luxury market falling hardest and stocks expected to follow once retail buyers stop pumping in money.