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Is the housing market going to crash in 2026? Experts explain what homebuyers should expect
Is the housing market going to crash in 2026? Experts explain home prices, mortgage rates, housing supply and why they expect stability instead of a collapse.
Experts do not expect the US housing market to crash in 2026. Most believe the market is becoming more stable after several years of big ups and downs. Instead of a crash, experts say the market is going through a correction. This means home prices and sales are slowing down, but the market is not collapsing.
Hoby Hanna, CEO of Howard Hanna Real Estate Services, said the current market is about stability, not a housing crash. Hanna said today's housing market is very different from the 2008 financial crisis, according to Yahoo Finance. Homeowners have high levels of home equity, banks are following stricter lending rules, and there are still not enough homes for sale. He added that the housing market is adjusting to new economic conditions and remains strong despite challenges. According to Hanna, buyers and sellers still have opportunities in the market.
Jobs market is not weak enough to trigger a housing crash
A weak job market can hurt housing demand because fewer people can afford to buy homes. The US economy lost around 966,000 job openings over the past year, raising concerns about economic growth. However, the May 2026 Job Openings and Labor Turnover Survey (JOLTS) showed that job openings stayed at 7.6 million, hires remained at 5.2 million, and total job separations stayed near 5.1 million.
The June 2026 ADP National Employment Report showed private companies added 98,000 jobs, beating market expectations. Private-sector pay also increased 4.4% compared with a year earlier.
Nela Richardson, ADP's chief economist, said hiring remains steady, although job growth is stronger in some industries like healthcare. Richardson also said workers changing jobs continued to receive stronger pay increases, according to Yahoo Finance. Overall, experts say the labour market is not weak enough to cause a housing market crash anytime soon.
Home prices are still rising
Home prices are not falling across the US. Price growth has slowed compared with early 2025, but values are still increasing. US home prices rose 0.8% year-over-year in May 2026 after rising 0.4% in April, according to real estate data company Cotality.
Thom Malone, principal economist at Cotality, said the housing market is seeing slow sales and slow price growth because incomes have not kept up with home prices. Malone said this is different from past recessions because the economy has not collapsed. He believes modest home price growth is the most likely outcome as buyers and sellers remain cautious. Malone added that the spring homebuying season could improve activity slightly, but not enough to cause a major boom.
Housing supply is still below normal
A housing market crash usually happens when there are far more homes for sale than buyers. Experts say that is not happening today. The National Association of REALTORS® (NAR) reported that the US had a 4.5-month housing supply in May 2026.
Rick Sharga, founder and CEO of CJ Patrick Co., said a balanced housing market normally has about six months of housing supply, according to Yahoo Finance. Before the 2008 housing crash, housing supply had reached about 13 months. Today's housing supply is much lower than it was before the last housing crash.
Why experts say 2026 is different from 2008
Many people compare today's market with the 2008 housing crash, but experts say the situations are very different. David Gottlieb, wealth advisor at Savvy Advisors, said lending rules have become much stricter since 2007. Banks now carefully check buyers' income, assets and employment before approving home loans, as noted by Yahoo Finance. The risky mortgages that helped cause the 2008 crisis are mostly gone today. Low-documentation loans and easy zero-down mortgages are no longer common.
Today's homeowners also have much more home equity than homeowners did before the last housing crash. The average American homeowner has nearly $300,000 in home equity. Because homeowners have built up more equity, many can lower asking prices if needed without immediately facing financial trouble. Gottlieb said comparing today's market with 2008 is like comparing "apples and oranges" because the financial system is much stronger now.
What could still cause a housing crash?
Although experts do not expect a crash now, they say it is still possible if the economy suffers a major shock. A severe stock market crash or a long period of large job losses could hurt the housing market. If unemployment rises sharply, many homeowners could struggle to make mortgage payments.
People who cannot make payments and cannot sell their homes could face foreclosure. A large increase in foreclosures could push home prices lower and increase the risk of a housing crash.
Sharga said buyers and homeowners should watch local market conditions, including population growth, job growth, wages, home sales and home prices. He said every housing market is different. Some cities or regions could see falling home prices even if national home prices continue rising. Sharga said those declines may not be large enough to be called a housing crash but could still affect homeowners, as stated by Yahoo Finance.
What a housing crash could mean for buyers
A housing crash could lower home prices, making houses more affordable for some buyers. However, housing crashes are often linked to job losses and economic problems. If unemployment rises, many buyers may find it harder to qualify for a mortgage even if home prices fall. People with stable jobs and savings could benefit by buying homes at lower prices during a market downturn. Experts say buyers should only purchase a home they can comfortably afford.
The overall view from economists and housing experts is that the US housing market is not heading for a crash in 2026. Home prices are still rising slowly, housing supply remains below normal, homeowners have strong equity, and lending standards are much stricter than they were before the 2008 financial crisis. Experts say the biggest risks to the housing market would be a deep recession, sharp job losses or a major economic shock, but they do not see those conditions leading to a nationwide housing crash at this time.
