After two years of a red-hot housing market fueled by low inventory and even lower interest rates, things seem to finally be cooling down.

As the 30-year fixed rate hovers near 6%, “fewer people are getting mortgages, homes are sitting on the market for longer, and some sellers are cutting prices,” Lending Tree Senior Economist Jacob Channel told the New York Post last month.

It’s “neither unexpected nor necessarily a bad thing,” he said. “Especially as it will give some buyers a bit more breathing room when they’re house hunting.”

Between sky-high prices and rising interest rates, homeownership is now out of reach for a lot of would-be buyers. And some are opting for risky adjustable-rate mortgages and interest-only mortgages that start out cheap, but can quickly become unaffordable.

“Anytime people are looking at adjustable-rate mortgages… there’s risk,” said Sarah Mancini, an attorney with the National Consumer Law Center.

It might be especially risky right now, as inflation sends the cost of just about everything soaring. Economists say there’s a 44% chance we’ll be in a recession within the next 12 months.

But with mortgage applications down 53.6% from a year ago, lenders eager to find new business are giving loans to folks with lower credit scores and higher debt-to-income ratios.

If that sounds eerily familiar to you, you’re not alone.

“There were some protections that were put in place in the wake of the last foreclosure crisis, but they’re not a silver bullet,” Mancini said.

“Everyone has thought that subprime lending is not going to come back,” she continued. “There’s no reason to think that it can’t or it won’t. These might be the market conditions that lead to that.”

Are we headed for another housing crash and recession like we saw in the late aughts?

Mark Zandi, chief economist at Moody’s Analytics, isn’t sounding the alarm just yet.

“I don’t think we’re going to see a crash for a number of reasons,” Zandi told Newsweek.

For one thing, there are still more buyers than homes for sale. Homeowners struggling to make their mortgage payment could sell their property rather than losing it to foreclosure. And with prices up 17.7% year over year, likely make a profit.

“Lending has been pristine since the financial crisis,” he said. “Mortgage lenders have been very cautious. So we’re unlikely to get a significant increase in defaults, foreclosures, and foreclosure-distressed sales.”

“That’s when you get crashes, when you have lots of foreclosures and a lot of distressed sales,” Zandi said. “That’s just not going to happen.”

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