The global economic and financial crisis has had a considerable impact on the Estonian economy and especially on the overheated real estate market. The current slowdown is also shaped by domestic demand. After too rapid economic growth until 2006 the cooling down from 2008 was faster then predicted. During the last year the situation in the real estate market has changed: household debt has risen quickly, housing market demand has decreased, housing purchasers have started to pay more attention to the quality and location of real estate and take time to decide upon the purchase. Access to bank financing is more selective: credit terms and conditions for households and residential property development firms are tighter. Firstly, the article analyses the current situation in the housing market in Estonia and the factors what are influenced the demand and supply side in the housing market. Secondly, risks considering the credit institutions loan activity to the real estate sector, especially to the housing loans. Thirdly, the problems with household debts and the financial situation of those households which have over exposed themselves with loans and mortgages.