Will The Housing Market Finally Crash in 2026_ (My Prediction)

In today's video, I want to give you a housing market update going into 2026. Next year, will there be a housing market crash that's going to make housing affordable for the majority of Americans? Or will this unaffordability crisis persist? So first, let me bring you up to speed. So what you're looking at is a five-year chart of the median sale price of a home in the United States of America. And don't worry, I'm going to show you at the local levels as well. So please take a look. Does this look like a housing market crash? To me, it does not. So I predicted back in 2024 that we would not have a housing market crash in 2025. This is where we are today, which is the most recent data going up to the end of November of 2025. The December data is not going to be published until later on in January. If you compare November of 2025 to November of 2024, home prices have actually increased by 0.7%. Therefore, personally, I don't consider that a housing market crash when you have home prices going up by 0.7%. Therefore, my prediction that I made back in 2024 about the housing market not crashing in 2025 was correct. So I don't want to be that guy that says, I told you so, but you know what? Factually speaking, I was right. I'm not going to lie about being right. The crash callers were wrong. So I'm just stating the facts. So the people that have been saying, oh, the housing market is going to crash, they've been saying that every year for the past four years. And I bet I have them very triggered right now. So please watch out for their comments down below. So listen, what I showed you was at the national level, right? But I acknowledge that real estate is local. And of the largest 300 metro areas in the US, here's where home prices have been declining over the past 12 months. The darker the red, the deeper the decline. And you can clearly see the distressed areas. It's concentrated in the South, it's Florida, and of course the West. Now of the top 300 metro areas in the US, here's where home prices have increased over the past 12 months. So sure, there's going to be pockets in the West and Texas, but most of the gains are coming from the Midwest and the East Coast. But the reality is that of the top 300 metro areas in the US, 98 metro areas saw home prices decline over the past 12 months. And 202 metro areas saw home prices go up. And on a national level, home prices are up by 0.7%. Are homes still expensive? The answer is yes. Are homes still unaffordable for most Americans? And I would say yes. Do I understand why people want home prices to crash? You know, probably because people would like to affordably own a home. So yes, of course I understand why. However, the reality of the situation is that this unaffordability crisis is not going to end anytime soon. So I want to tell you what I'm afraid of in 2026. So the Federal Reserve has been cutting interest rates, as most people are already aware. But it is my belief that with the new Fed chair coming in May, the committee is going to cut interest rates even more aggressively. But it's not just that. It's not just interest rate cuts. Because the Federal Reserve has other tools that they can implement to lower rates even more aggressively. Now I want you to think about that. Because if the Federal Reserve, if their policy lowers mortgage interest rates, then yeah, that's going to lower the cost of borrowing, lower the cost of financing, right? However, that would increase demand and put upward pressure on home prices. I'm simply saying inflation. Also, another thing you have to think about is that the Federal Reserve also restarted the money printing on December 12th. So they're printing at a rate of $40 billion a month. And of course, that is inflationary. If they're going to print all that money, what's going to happen? I mean, the price of food, the price of utilities, the price of housing, it's all going to experience upward pressure. I just want to say that it wouldn't be a problem if people got a standard 6%, 7%, 8, 9, 10% raise a year to keep up with inflation. But people don't. The CPI inflation report just said that wages are growing by 2.7%. That's annualized rates. But you know what? That is greatly lagging the inflation rate because of all the money printing. And I just want to show you the expanding money supply over the past 25 years. And this is coming straight from the Federal Reserve. It just keeps going up. More and more US dollars, which are backed by nothing, are being printed and loaned into existence. Just take a look at the chart. This is why stocks keep going up in the long run. This is why home prices just keep going up in the long run. This is why food prices, utilities, they just keep going up in the long run. The median price of a home back in the year 2000 was $119,000. You know, I bet a lot of people remember that popcorn at the movie theater was $1. I mean, that's a price where you're not even incentivized to sneak food into the movie theater. I mean, you could buy things from a vending machine with a quarter. Now you need a credit card. Okay, so what's in store for us for 2026? I want you to think about it. So you're telling me that they're cutting interest rates, they're printing money, and money supply is at a record high and going higher. If that's going to be the setup for 2026, then why would there be a housing market crash? Why would there be a huge fall in home prices? The NAR, the National Association of Realtors, is predicting a housing market comeback. They're actually predicting that home prices are going to go up by 4% next year. And they're calling next year a situation of haves and have-nots. So that's a situation where people who already own a home will continue to build equity, and people looking to buy a home will struggle to get in. The NAR says that first-time homebuyers have now dropped to an all-time low of 21%, so that's below the normal rates of 40%. And the median age of a first-time homebuyer has now dramatically increased to 40 years old. Now, I want to show you what's going on with mortgage interest rates. You're looking at a five-year chart, and this is coming from the Federal Reserve. The average 30-year fixed is slightly above 6% right now. As I expected, interest rates on a 30-year fixed have been falling. So the average was at 7% at the start of the year. And they were, of course, flirting around 8% about two years ago. So as I said last year, I expected interest rates to fall gradually, but they're going to be a long ways off from the 3% and sub-3% that some people are fortunate enough to get as recently as 2022. But of course, people would like to know where do we go from here. Personally, I believe that the 30-year fixed will continue its downward trajectory. It's just a question of when is it going to happen. When is it going to happen in a meaningful way where it's going to make a difference? When are we going to break free from this 6-7 range? So the Federal Reserve has been cutting interest rates, but we're still range-bound. The problem is that the Federal Reserve has more control over shorter-term interest rates. Mortgage interest rates, they're going to be at the mercy of the bond market, specifically the 10-year yield, which we've previously discussed. The problem is that there's not strong enough demand for American notes and bonds. Otherwise, we would see those interest rates fall and then mortgage interest rates would come down as well. But why is there not strong enough demand? We're not going to get into that today, but in a nutshell, it's because of the higher inflation expectations as well as the whole process of de-dollarization, which is in a large part due to all the money printing. But I just want to show you what the experts and the institutions are saying. Here are the predictions for what mortgage interest rates are going to be by the end of 2026. And this is coming from Realtor.com, National Association of Realtors, Fannie Mae, and Redfin. So this is coming from their chief economists. Realtor.com says they're predicting 6.3%. National Association of Realtors, NAR, says 6.0%. Fannie Mae says 5.9%. Redfin says 6.3%. Essentially, they're expecting mortgage interest rates to stay range-bound for 2026. Listen, if you're trying to buy a home or if you're trying to refinance, I understand that that is disappointing to hear. Honestly, the best solution for this housing unaffordability crisis would be to build more homes, right? Well, of course, that is easier said than done. So I just want to address this. We've covered the stats more in-depth in previous videos, but I just want to say this. So you would think that in a housing shortage, home builders are just swimming in money, swimming in profits. I mean, their product is in shortage, right? Unfortunately, that's not the situation because the cost to build a home has gone up dramatically as well. Thanks to inflation, of course, builders are experiencing rising construction costs for materials as well as labor. And on top of that, the tariffs have increased input costs. So they need to build homes as cheaply as possible. Of course, that's what they're incentivized to do, right? However, they end up at a price point that's still too high for most Americans to afford. And then the builders are even, they're even having to cut their prices, which means that they're not incentivized to produce homes at full throttle. So I'm telling you like the economics of this whole housing situation is all screwed up now. So it's not just, it's not as easy as just build more homes. So I just want to say that personally, I believe that the real problem is that wages are not keeping up with inflation. So I'm going to tell you this. I don't know how you're going to take it. You might find it funny and comical or shocking or just sad, maybe all three. So here's what it is. The government reported that wages are growing at a rate of 2.7%. And they said that inflation is growing at a rate of 2.7%, which shocked the public because the expectation was that the rate of inflation is at 3.1%. However, because of the government shutdown, the government said that they had trouble collecting the inflation data. Therefore, they said that the housing inflation for the CPI inflation report, like, Oh, let's just set it at 0% because they didn't have the data, which brought down the overall inflation rates in the most recent reports. Anyways, we all know that the rate of inflation is not 2.7% or even 3.1%. It's closer to 6%, 8%, 10%, depending on how quickly they're printing the money. Just look at the money supply, which means that inflation is substantially outpacing wage growth, disallowing people to buy a home. So can you believe that that's how the government operates? Like that's how they do their work. That's the quality of their work. Anyways, that's the whole situation right now. I don't expect the housing market crash for 2026. I expect this unaffordability crisis, unfortunately, to persist. Let me know what you think. I look forward to reading your comments. Please subscribe. Thank you for the support and I wish you a very nice day. Take care.