A leading housing analyst has issued a stark warning that the United States property market could be heading for a price correction more severe than the 2008 financial crisis, with values potentially plummeting by half within mere months.
The Warning Signs Are Mounting
Melody Wright expressed her grave concerns during a recent appearance on the Thoughtful Money podcast with Adam Taggart, pointing to alarming data from a Zillow report that reveals home values are declining for the majority of American properties.
The research shows that 53 percent of US homes have lost value over the past year, representing the highest proportion since 2012 when the market finally reached its lowest point following the previous housing collapse.
Wright stated unequivocally that these statistics indicate an impending market correction that could surpass the severity of the 2008 housing bubble burst. "I think we're going to correct all the way to a point where household median income matches the home price, the median home price," she explained.
Understanding the Market Dynamics
The housing expert elaborated that property values have been declining throughout 2025 following the pandemic-era housing boom, primarily because purchasing activity has significantly slowed.
Wright attributed part of this downturn to economic uncertainty during Donald Trump's tariff war earlier this year, which caused many potential buyers to develop 'cold feet' about proceeding with purchases.
"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," Wright noted. However, she observed a recent shift in the market's lower tiers that could signal more widespread trouble.
"What I've been seeing over the last three months - that $100,000-$250,000 sales price - we are starting to see incremental increases in sales in that category. As it continues, it will start to drag the median down. It's happening already and that's where we're seeing the deceleration."
Diverging Expert Opinions
Not all market observers share Wright's pessimistic outlook. Zillow's senior economic researcher Treh Manhertz offered a more measured perspective, suggesting the current pullback represents a 'normalization' rather than an impending crash.
"Homeowners may feel rattled when they see their Zestimate drop," Manhertz acknowledged. "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. What we're seeing now is a normalization, not a crash."
Chris Reis, a broker with Compass in Seattle, firmly rejected Wright's prediction when speaking with the Daily Mail. "The market today could not be more different," he argued. "We have a severe housing shortage, lending practices are significantly more stringent, most homeowners have significant equity in their properties and rates locked below four percent."
Reis emphasised that the structural issues that caused the 2008 collapse simply aren't present today, suggesting that anyone waiting for prices to halve will be disappointed.
Meanwhile, public reaction to Wright's warning has been mixed, with some commentators accusing her of fearmongering while others expressed hope that significant price drops might finally make homeownership accessible to younger generations again.
As the US housing market ends the year with essentially flat price growth, all eyes will be on whether 2026 brings the dramatic correction Wright predicts or the continued normalization that other experts anticipate.
