Read more: Want to buy a house in 2026? Here’s what you need to know.<\/a> <\/p>\n Is the housing market going to crash soon? <\/p>\n Generally, experts don’t foresee a housing market crash in 2026, and recently enacted legislation could prop the real estate market up. <\/p>\n “The U.S. housing market faces a deepening affordability crisis that is driving home ownership further out of reach for many consumers,” a recent J.P. Morgan real estate market outlook stated. “To this end, Congress recently passed the 21st Century ROAD to Housing Act in July \u2014 a bipartisan piece of legislation that aims to reduce housing costs and increase housing supply.” <\/p>\n However, the bill’s initiatives won’t take effect until Jan. 7, 2027. <\/p>\n Another dynamic in an evolving housing market: sellers outnumber buyers. In August, Redfin reported that the number of owners listing their homes was 58% higher than the number of buyers. It was the biggest spread between buyers and sellers since such stats began being gathered in 2013. <\/p>\n “Even during a time when housing costs are elevated, the surplus of sellers over buyers makes it a good time to be a house hunter, in some respects,” Asad Khan, a senior economist at Redfin, said in a release. <\/p>\n Yet the analysis noted that it’s only a buyer’s market for people who can afford to buy.\u00a0 <\/p>\n “High housing costs and widespread economic uncertainty have caused many would-be buyers to back off in recent years, creating the imbalance of buyers and sellers we see today,” Redfin reported. <\/p>\n Read more: Understanding housing inventory and how it shapes the real estate market<\/a> <\/p>\n What about jobs data? <\/p>\n The jobs market has been durable. In September, private-sector employment grew by 90,000 jobs, exceeding expectations. <\/p>\n “It’s a strong report,” said Dr. Nela Richardson, chief economist at ADP. “After a three-month slowdown, job creation rebounded and pay growth remained solid.” <\/p>\n The latest economic analysis of the national economy by UCLA Anderson, released Sept. 30, described a U.S. economy that has “proved surprisingly resilient through a series of shocks.” <\/p>\n “The tariff increases that dominated the outlook in late 2025 were followed by the war in Iran and a sharp increase in oil prices in the spring. Despite those disruptions, underlying economic growth has remained around or above 2%,” the report noted.\u00a0 <\/p>\n The analysis expects the labor market to stabilize, with unemployment remaining near 2%.\u00a0 <\/p>\n So, the jobs market is healthy enough that a housing market crash isn’t expected anytime soon. <\/p>\n Home prices continue to slowly rise\u00a0 <\/p>\n U.S. annual home price growth increased by only 1.4% in July, according to real estate data company Cotality. <\/p>\n “While prospective buyers may feel squeezed by volatile mortgage rates, slower home price appreciation should gradually help ease affordability pressures \u2014 especially if wage growth remains consistently stronger,” Dr. Selma Hepp, Cotality’s chief economist, said in an analysis. “As we move through the remainder of the year, local labor market dynamics and affordability constraints will continue to shape housing market performance as much as broader macroeconomic shifts, especially the direction of mortgage rates.” <\/p>\n Read more: Learn more about why home prices are so high.<\/a> <\/p>\n Housing market crashes: Supply and demand dynamics <\/p>\n For the housing market to crash, supply and demand must be drastically out of balance, favoring supply. While supply is tight, the discrepancy isn’t as drastic as it was in 2008. As of August 2026, the US Census Bureau reported a housing supply of 8.5 months. <\/p>\n “In a normal market balanced between buyers and sellers, we would have a six-month supply of homes,” said Rick Sharga, founder and CEO of CJ Patrick Co., a market intelligence firm for real estate and mortgage companies. For comparison, the buildup to the 2008 financial crisis led to a drastic oversupply \u2014 13 months. <\/p>\n The National Association of Realtors reported that affordability improved in August for the second month in a row, following a five-month decline.\u00a0 <\/p>\n Read more: See how historical mortgage rates compare to rates today.<\/a> <\/p>\n Housing crisis lessons for today <\/p>\n The housing crash that started in 2007 and contributed to the global financial crisis continues to weigh heavily on the minds of many economists and consumers. But the factors that led to that crash are not in place today. Not only are housing supply levels and home equity levels vastly different, but mortgages are a different animal as well. <\/p>\n “Lending practices have tightened significantly since 2007, making for a wildly different scenario today than we faced back then,” David Gottlieb, a wealth advisor at Savvy Advisors, said via email. <\/p>\n Gone are the days of low- to no-documentation mortgages and zero down for anyone and everyone. Today, lenders want buyers willing to put skin in the game. The lowest down payments are typically with VA loans<\/a> \u2014 which offer zero down \u2014 and FHA loans<\/a> \u2014 offering down payments as low as 3.5%. Both loans still require income, asset, and employment verification. <\/p>\n With those subprime lending products gone and most mortgage lenders<\/a> requiring money down, today’s homeowners also have significantly more home equity than those from the early 2000s. Today, the average American has just over $310,000 in home equity, and sellers can afford to cut prices to close a deal. <\/p>\n “When comparing the financial health of the consumer and banking industry between 2008 and today, we truly are looking at apples and oranges,” Gottlieb said. <\/p>\n Signs of a housing market crash <\/p>\n Whether you’re monitoring your home’s value<\/a> or hoping to buy a new home, you may want to watch for signs of a future housing market crash. An economic shock, such as a significant stock market crash or a prolonged period of job cuts, could signal the start of a housing market crash. <\/p>\n If unemployment rose rapidly and homeowners couldn’t afford their mortgage payments, they could lose their homes to foreclosure<\/a> if they couldn’t sell them. A large increase in foreclosures would bring home values down, potentially triggering a housing crash. <\/p>\n Sharga suggested that consumers watch their local market conditions, such as whether the population and the job market are growing or declining, along with wages, home sales, and home prices. <\/p>\n “While a national housing crash remains very unlikely, every market is unique, and some are likely to see prices go down even as the national numbers are going up \u2014 probably not enough to designate it as a ‘crash,’ but enough to make a difference for some homeowners,” Sharga said. <\/p>\n Read more: Determine which is more important, your home price or mortgage rate.<\/a> <\/p>\n What a housing market crash could mean for home buyers <\/p>\n A housing crash is a mixed bag for home buyers. Crashes typically come with other economic undesirables, like job losses. Even if housing prices drop<\/a>, increasing unemployment numbers could mean many Americans find it more difficult to qualify for a mortgage. <\/p>\n On the other hand, some home buyers could welcome a crash. Lower prices could mean those who have saved and are steadily employed have first dibs on more affordable housing. <\/p>\n Read more: Learn whether you should buy a house during a recession.<\/a> <\/p>\n What a housing market crash could mean for sellers <\/p>\n In a housing crash, homeowners who don’t need to sell may prefer to wait until home values regain their strength. Being “underwater” on your mortgage<\/a> \u2014 owing more on your mortgage balance than the value of your home \u2014 as many people were during the previous housing market crash, doesn’t immediately impact your finances. <\/p>\n However, if you need to sell your house<\/a>, you may need to consider more competitive pricing. Buyers in market crashes are looking for bargains, and you may end up with less profit on your home than you anticipated. <\/p>\n How to prepare for a potential housing market crash <\/p>\n If you’re worried about when the housing market will crash again, you can take steps to protect your financial well-being. <\/p>\n Build an emergency fund. Experts recommend having three to six months’ expenses in the bank. <\/p>\n Pay down your debt. Try to prioritize high-interest debt, like credit cards. <\/p>\n Buy within your budget. Whether the market crashes or not, it’s always wise to have a mortgage you can comfortably afford<\/a>. <\/p>\n Make extra mortgage payments. Even a little bit extra each month can help you build equity in your home faster. <\/p>\n Choose a fixed-rate mortgage. Enjoy a steady mortgage payment, and don’t worry if rates increase \u2014 a fixed mortgage rate<\/a> is locked in, regardless of what happens in the real estate market. <\/p>\n Housing market crash FAQs Have house prices fallen in 2026? <\/p>\n While some markets have shown a slight decline, nationally, home prices are up only slightly so far this year. The most recent data from Cotality shows that annual home prices were up only 1.4% in July. <\/p>\n Is 2026 a good year to buy a home? <\/p>\n