Housing analyst Melody Wright has warned that the U.S. housing market could face a price correction more severe than the 2008 crash, with median home prices potentially dropping by more than half. The comments were made in an interview with Adam Taggart on the Thoughtful Money podcast, citing data from a recent Zillow report showing that home values have declined for more than half of U.S. properties.
According to the Zillow data, 53% of homes nationwide lost value over the past year, marking the highest level since 2012, when the housing market bottomed out after the last major crash.
“I think we're going to correct all the way to a point where household median income matches the median home price,” Wright said, warning the situation could accelerate even faster than last time.
Wright attributed recent declines to the cooling of the pandemic-era housing boom, as buyers are not purchasing at the same pace. Economic uncertainty, including concerns over tariff policy, has caused many potential buyers to delay purchases, leaving higher-priced homes as the primary market activity.
“You have this bifurcated housing market, but the majority of folks transacting are in these upper tiers, so your median home price is going to be higher,” she explained.
“However, over the last three months, we are starting to see incremental increases in sales in the $100,000–$250,000 range.”
The prediction sparked debate. Some commentators criticized Wright’s forecast as fearmongering, while others welcomed the possibility of declining prices, which could make homeownership more accessible.
Zillow emphasized that the current market pullback represents a normalization rather than a crash.
“Homeowners may feel rattled when they see their Zestimate drop,” said Treh Manhertz, a senior economic researcher at Zillow.
“But relatively few are selling at a loss. Home values surged over the past six years, and the vast majority of homeowners still have significant equity.”
Real estate professionals also downplayed the risk of a repeat of 2008. Chris Reis, a broker with Compass in Seattle, told the Daily Mail that today’s market differs significantly from the conditions that led to the last crash, citing a severe housing shortage, stricter lending practices, and widespread equity in properties with historically low mortgage rates.
“There simply won’t be a need to panic sell like there was in 2008,” Reis said.
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