The U.S. housing market peaked in 2006 before the 2008 financial crisis.
Home prices reached their national high around early 2006, after years of rapid growth driven by low interest rates, relaxed lending standards, speculative buying and widespread mortgage refinancing. The subsequent decline began in 2006 and accelerated through 2007 as sales weakened, inventories grew and foreclosures increased.
The downturn was not identical everywhere. Some markets began falling earlier, while others continued rising for a time. The S&P/Case-Shiller national home-price index later recorded substantial declines, and the collapse in housing values helped undermine mortgage-backed securities and financial institutions.
A common mix-up is choosing 2008 because that was the year the financial crisis became especially severe, including the failure of Lehman Brothers. The housing market had already passed its national peak by then. The bursting housing bubble, subprime mortgage losses and broader credit crisis were connected events that unfolded over several years rather than in a single year.