--- title: "US housing market poised to crash ‘worse than 2008,’ expert warns. And 50% plunge could start in 2026. Protect yourself" description: "Housing analyst Melody Wright warns that the U.S. housing market could face a crash worse than 2008, with a potential 50% price drop starting in 2026. Unlike the previous crash, large investors may no" type: "news" locale: "en" url: "https://longbridge.com/en/news/268651197.md" published_at: "2025-12-04T16:37:00.000Z" --- # US housing market poised to crash ‘worse than 2008,’ expert warns. And 50% plunge could start in 2026. Protect yourself > Housing analyst Melody Wright warns that the U.S. housing market could face a crash worse than 2008, with a potential 50% price drop starting in 2026. Unlike the previous crash, large investors may not intervene this time. The gap between median home prices and household income is significant, with home values having surged 42% over the past decade. Wright suggests that prices need to fall to align with median incomes. The downturn could begin in earnest next year and take several years to bottom out. *Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.* The 2008 housing meltdown was brutal — home values collapsed, millions of Americans were pushed into foreclosure and trillions in household wealth evaporated. Now, housing analyst Melody Wright is warning that the next downturn could be even worse. In a recent interview with Adam Taggart on “Thoughtful Money,” Wright said the U.S. housing market is heading for a significant correction. ## Must Read - Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how - Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP - Approaching retirement with no savings? Don’t panic, you're not alone. Here are 6 easy ways you can catch up (and fast) “I think, Adam, we're going to correct all the way to a point where household median income matches the median home price. And so that is going to be worse than 2008,” she said (1). Wright noted that during the last crash, prices were on their way toward that equilibrium — where median incomes and median home values align — but “Wall Street came in to buy those,” effectively stopping the decline. This time, she argues, large investors may not step in. The disconnect between home prices and household income is striking. According to Federal Reserve data, the median sales price of a U.S. home reached $410,800 in Q2 2025 — a 42% jump over the past decade. Realtor.com estimates a typical household now needs to earn roughly $118,530 a year to afford a median-priced home (2). The actual median household income as of 2024, when the latest data was available? Just $83,730 according to the Federal Reserve Bank of St Louis. That’s a wide gap. When asked how far prices would need to fall to restore balance, Wright didn’t mince words: “It's going to be near your 50% — and much greater in certain areas (1).” It’s a chilling prospect. Given how much U.S. household wealth sits in home equity — and how much leverage many recent buyers are carrying — a 50% decline would be devastating. There are already hints of a shift. Zillow recently reported that 53% of U.S. homes lost value over the past year — the highest share since 2012 — with an average drawdown of 9.7% (3). Wright believes the coming correction could take several years to fully play out, but she thinks the downturn could begin as early as 2026. “I believe we could get started in earnest next year on the price decline and see a rather large drop historically speaking, but still think it could take several years to bottom,” she told Newsweek (4). She’s not the only one sounding alarms. Treasury Secretary Scott Bessent recently said the housing market is already in a “recession” due to Federal Reserve policy (5). And “Rich Dad, Poor Dad” author Robert Kiyosaki has warned that the “biggest crash in history” is beginning — adding that “residential real estate crashes” in this scenario as well. If you share these concerns, now may be a good time to start preparing. ## A safe haven for ‘bad times’ When storm clouds gather over the markets, gold often reclaims the spotlight. Long seen as the ultimate safe haven, gold isn’t tied to any single country, currency or economy. It can’t be created at will by central banks like fiat money and in times of economic turmoil, market turbulence or geopolitical uncertainty, investors tend to pile in — driving up its value. Over the past 12 months, gold prices have surged by more than 50%. Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has repeatedly emphasized gold’s importance in a resilient portfolio. “People don't have, typically, an adequate amount of gold in their portfolio,” he told CNBC earlier this year. “When bad times come, gold is a very effective diversifier.” One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals. Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties. To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases. **Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)** ## Build a safety net The 2008 housing crash didn’t just wipe out home equity — it rippled through the entire economy. Layoffs mounted, the unemployment rate spiked and families across the country found themselves suddenly vulnerable. If another major correction is coming, it’s worth strengthening your safety net before the ripple effects hit. One of the most effective ways to do that is by having a cushion of readily accessible cash. If your income suddenly takes a hit, that buffer helps you stay afloat without taking on costly debt or being forced to sell investments at the worst possible time. So how big should that safety net be? Personal finance expert Dave Ramsey suggests having an emergency fund that can cover three to six months worth of living expenses. What matters most, though, is consistency — adding a little at a time until your safety net starts to take shape. To get started, a high-yield account, such as a Wealthfront Cash Account, can be a great place to grow your emergency fund, offering both competitive interest rates and easy access to your cash when you need it. A Wealthfront Cash Account can provide a base variable APY of 3.50%, but Moneywise readers can get an exclusive 0.65% boost over their first three months for a total APY of 4.15% provided by program banks on your uninvested cash. That’s over nine times the national deposit savings rate, according to the FDIC’s September report. With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks. ## Get expert guidance At the end of the day, everyone’s financial situation is different — from income levels and investment goals to debt obligations and risk tolerance. And when the economic outlook is uncertain, those differences matter even more. If you’re unsure where to start, now could be the right time to get in touch with a financial advisor. With Vanguard, you can connect with a personal advisor who can help assess how you’re doing so far and make sure you've got the right portfolio to meet your goals on time. Vanguard’s hybrid advisory system combines advice from professional advisers and automated portfolio management to make sure your investments are working to achieve your financial goals. All you have to do is fill out a brief questionnaire about your financial goals and Vanguard’s advisers will help you set a tailored plan and even help you stick to it. Once you’re set, you can sit back as Vanguard’s advisors manage your portfolio. Because they’re fiduciaries, they don’t earn commissions, so you can trust that the advice you’re getting is unbiased. ## You May Also Like - Vanguard reveals what could be coming for U.S. stocks, and it’s raising alarm bells for retirees. Here’s why and how to protect yourself - Does Class B real estate have a place in your portfolio? Rich investors think so — here’s why, and how it could work for you - Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and ‘anyone’ can do it - Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion’ ### Article sources *We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.* *This article provides information only and should not be construed as advice. 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