FDIC: Slim Odds on Housing Crash

New research by the Federal Deposit Insurance Corp. reveals that home prices usually stagnate, rather than crash, following housing booms—which are characterized by growth of 30 percent or more over a period of three years.

Although the housing market is not likely to collapse, the FDIC notes that the increased use of home-equity credit lines and subprime and high loan-to-value mortgages, as well as other market changes, will make it more difficult to gauge home prices down the road.

Housing collapses typically do not occur on the national level, according to the study, as they are sparked by local economic declines.