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

“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.

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.