US housing market poised to crash ‘worse than 2008,’ expert warns. And 50% plunge could start in 2026. Protect yourself

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The 2008 lodging meltdown was brutal — location values collapsed, millions of Americans were pushed into foreclosure and trillions successful household wealthiness evaporated. Now, lodging expert Melody Wright is informing that the adjacent downturn could beryllium adjacent worse.

In a caller interrogation with Adam Taggart connected “Thoughtful Money,” Wright said the U.S. lodging marketplace is heading for a important correction.

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“I think, Adam, we're going to close each the mode to a constituent wherever household median income matches the median location price. And truthful that is going to beryllium worse than 2008,” she said (1).

Wright noted that during the past crash, prices were connected their mode toward that equilibrium — wherever median incomes and median location values align — but “Wall Street came successful to bargain those,” efficaciously stopping the decline. This time, she argues, ample investors whitethorn not measurement in.

The disconnect betwixt location prices and household income is striking. According to Federal Reserve data, the median income terms of a U.S. location reached $410,800 successful Q2 2025 — a 42% leap implicit the past decade.

Realtor.com estimates a emblematic household present needs to gain astir $118,530 a twelvemonth to spend a median-priced location (2). The existent median household income arsenic of 2024, erstwhile the latest information was available? Just $83,730 according to the Federal Reserve Bank of St Louis. That’s a wide gap.

When asked however acold prices would request to autumn to reconstruct balance, Wright didn’t mince words: “It's going to beryllium adjacent your 50% — and overmuch greater successful definite areas (1).”

It’s a chilling prospect. Given however overmuch U.S. household wealthiness sits successful location equity — and however overmuch leverage galore caller buyers are carrying — a 50% diminution would beryllium devastating.

There are already hints of a shift. Zillow precocious reported that 53% of U.S. homes mislaid worth implicit the past twelvemonth — the highest stock since 2012 — with an mean drawdown of 9.7% (3).

Wright believes the coming correction could instrumentality respective years to afloat play out, but she thinks the downturn could statesman arsenic aboriginal arsenic 2026.

“I judge we could get started successful earnest adjacent twelvemonth connected the terms diminution and spot a alternatively ample driblet historically speaking, but inactive deliberation it could instrumentality respective years to bottom,” she told Newsweek (4).