As a real estate professional, one of the most common questions I get is, "When are home prices going to come down?"It makes sense;buying a home is a huge financial decision. With the headlines predicting crashes, recessions and market downturns, it's natural to want to wait for the housing market to become more affordable. TAX SOFTWARE DEALS OF THE WEEK H&R Block Free Simple Tax Returns eFile: $0 (save $0) TurboTax Deluxe 2024 (Federal and State, PC/Mac Download): $56 (save $24) TurboTax Premier 2024 (Federal and State, PC/Mac Download): $83 (save $32) TaxSlayer Classic Plan: $28 (save $10) Deals are selected by the CNET Group commerce team, and may be unrelated to this article.Yet real estate doesn't behave the way a lot of people think it does. Sure, home values can fluctuate, but prices are stuck at all-time highs. We can partly blame inflation, which is making everything more expensive. We can also blame a massive housing shortagefor keeping competition up. Across most of the US, we still don't have enough homes available for those who want to buy them.It's my job as a realtor to tell my clients never to rush out and buy the first home they see. But if you're still sitting on the sidelines waiting for a major drop in home prices, you might be waiting forever.Home prices aren't dropping anytime soonA lot of people think real estate is like a stock -- prices go up, prices go down. If you time the market, you can get in at the lowest possible price. Except homes aren't like stocks at all.Home prices don't just suddenly drop. A combination of factors prevents them from falling significantly, from supply and demand to inflation, from mortgage rates to homeowners' emotional attachment to their properties.I've been in the real estate industry long enough to know that housing downturns don't happen in a vacuum. Let's dive into the key reasons why a big price drop in today's market is unlikely.Home prices don't just suddenly drop. A combination of factors prevents them from falling significantly, from supply and demand to inflation, from mortgage rates to homeowners' emotional attachment to their properties. 1. Supply is low, demand is highAt its core, the housing market is driven by supply and demand. When there are more buyers than available homes, prices go up. Depending on what report you read, the US is short between four and six million homes.The severe undersupply of homes has been a problem for over a decade. After the 2008 financial crisis, homebuilding slowed dramatically and never fully ramped back up. Restrictive zoning laws and rising construction costs have made it difficult to build new homes at the pace needed. In many areas, the high cost of breaking ground on new construction incentivizes builders to just focus on higher-end homes, leaving first-time buyers with even fewer options.At the same time, demand for homes is strong. Millennials, the largest generation in the country, are in their prime homebuying years, and many are determined to buy. As long as market demand exceeds supply, home prices will stay strong.2. Inflation keeps home prices elevatedIf you've been to the grocery store, filled up your gas tank or paid for any service lately, you've seen firsthand how inflation affects prices. Housing is no different.Inflation puts long-term upward pressure on prices. After peaking in early 2022, inflation started to ease after the Federal Reserve's series of interest rate hikes. But recent data shows consumer prices rising again.As inflation erodes the value of money, tangible assets like real estate become more expensive. A home that cost $300,000 in 2010 would now be worth around $427,000 just from inflation alone. Even if housing demand cools temporarily, home values tend to rise over time simply because of how our financial system works.3. It costs a lot to sell a homeSelling a home isn't as simple as listing it online and waiting for offers. It's a process that comes with significant costs for sellers, including real estate commissions, closing costs, staging expenses and potential repairs.For many homeowners, selling is expensive and doesn't make much financial sense. Sellers would rather stay put than take a financial hit, and fewer homes on the market prevent prices from falling.4. The rate-lock effect freezes supplyThe rate-lock effect is one of the biggest reasons why existing homes aren't hitting the market.During the pandemic, millions of homeowners locked in ultra-low mortgage rates, some as low as 2 to 3%. These homeowners are not eager to trade their sub-3% mortgage for a new one at 7%. Even with home values rising, many homeowners don't want to take on a significantly higher mortgage payment for their next home.Until mortgage rates come down substantially, many homeowners will stay put, keeping inventory tight and prices steady.5. People selling homes are also buying themMost sellers are also buyers. Every home that gets sold is usually offset by another purchase. Unlike in 2008, when foreclosures flooded the market, today's sellers are typically moving by choice, not out of necessity.Demand for homes has a lot to do with life stages. People get married, have kids, relocate for jobs, downsize or look for better schools. Even in a high-rate environment over the last two years, these factors have kept the housing market moving.6. Homeowners see higher value in their propertiesPeople have a deep emotional connection to their homes, and that plays a role in pricing. When homeowners see a neighbor's house sell for top dollar, they often believe their home is worth the same or more. Even in slower markets, homeowners are reluctant to accept lower offers unless they absolutely have to sell.Unlike stocks, where people are quick to cut losses, homeowners tend to hold onto their properties rather than take a perceived loss. This is another reason why home prices tend to be sticky, even during economic downturns.Would a recession lead to lower home prices?I often hear the argument that home prices will drop if we enter a recession. While it's true that economic downturns can impact housing, most recessions don't lead to significant price declines.Historically, home prices have remained stable or even risen during recessions. Layoffs tend to impact lower-income workers who are less likely to be homeowners, and those who do own homes typically have enough equity to avoid distressed sales. Unlike in 2008, where risky lending led to foreclosures, today's homeowners are in a much stronger financial position.Why it costs more to wait to buy a homeOver the last 60 years, home prices have appreciated at an average rate of 4.6% per year. If you're waiting for a housing crash, you're betting against a trend that has been remarkably consistent.Even if home prices stagnate, interest rates could stay high, which impacts affordability far more than a small price drop. And it could end up costing you more to wait. Renting instead of buying means missing out on years of home equity, and inflation will just continue making homes more expensive over time.Tips for homebuyersIf you're trying to decide whether to buy, focus on your own financial situation rather than trying to time the market.Financial stability: If you can afford a down payment, make sure your projected monthly mortgage payment is comfortable and sustainable. You should also have enough money in the bank for closing costs, insurance, taxes and other homeowner fees.Consider different markets: Not all real estate markets are created equal. Pay attention to what's happening in your specific area. At the time of this article, Florida inventory is growing while the Northeast is still in very short supply.Think long term: Real estate is not about what will happen today or tomorrow but rather decades from now. As a general rule, plan to stay in your home for at least five or seven years so that short-term market fluctuations won't matter much.Read more: