Housing Correction Forecast Signals Potential Price Crash Ahead

Housing analyst Melody Wright predicts a dramatic correction, saying median home prices could drop by more than 50%.
Zillow reports that 53% of US homes lost value over the past year—the highest rate since 2012.
Some experts reject Wright’s forecast, but others say lower prices could help restore affordability.

Key Takeaways

A Warning Shot

Globe St reports that housing market analyst Melody Wright issued a stark warning in a recent interview. She said home prices may fall more than 50%, making them align more closely with median household incomes. Speaking on the Thoughtful Money podcast, Wright said this correction could unfold faster than the 2008 crash.

The Data Behind the Concern

Wright pointed to new data from Zillow. The report shows that 53% of homes across the US have declined in value over the past year. That’s the highest level of depreciation since 2012, when the market bottomed out after the last housing crash.

She attributes the downturn to the cooling of the pandemic-era buying frenzy. Fewer people are purchasing homes now, especially in the middle and lower tiers. That slowdown has left higher-priced properties as the main source of market activity. The Sun Belt, which previously saw explosive growth, has recently shown signs of slowing, particularly in cities that overheated during the boom.

“You have this bifurcated housing market,” Wright said. “The majority of buyers are in upper price tiers, so your median home price looks high—even as affordability worsens.”

A Divisive Prediction

Wright’s forecast has divided experts and commentators. Some accuse her of fearmongering. Others believe falling prices could give more people a chance at homeownership.

Zillow responded to the concerns by downplaying the severity of the trend. Senior economic researcher Treh Manhertz said the current pullback reflects a “normalization,” not a crash.

“Homeowners may feel rattled when they see their Zestimate drop,” Manhertz said. “But most aren’t selling at a loss. Prices surged over the past six years, and most owners still hold strong equity positions.”.

Why 2025 Isn’t 2008

Other industry voices echoed Zillow’s position. Chris Reis, a Compass broker in Seattle, said today’s market differs sharply from the one that collapsed in 2008. He pointed to stricter lending rules, historically low interest rates, and a nationwide housing shortage.

“There won’t be a reason for people to panic sell like they did in 2008,” Reis said. “Most homeowners are locked into low rates and have equity they didn’t have back then.”

What’s Next

Wright’s dire prediction may not play out exactly as she described, but it reflects growing concerns about affordability. The post-pandemic boom has clearly cooled. Activity in lower price ranges is picking up, and many experts will be watching closely for signs of a broader shift in 2026.