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The housing meltdown of 2008 was brutal — home prices collapsed, millions of Americans were pushed into foreclosure and trillions in household wealth evaporated. Now, housing analyst Melody Wright warns that the next recession could be worse.
In a recent interview with Adam Taggart on “Thoughtful Money,” Wright said the U.S. housing market is headed for a significant recovery.
“I think, Adam, we’re going to correct all the way to the point where median household income matches median house prices. And so it’s going to be worse than 2008,” she said (1).
Wright notes that during the last crash, prices were headed toward that equilibrium—where median incomes and median home values aligned—but “Wall Street came in to buy them,” effectively halting the decline. This time, he argues, big investors can’t step up.
There is a disconnect between house prices and household income. According to Federal Reserve data, the median sales price of a US home will reach $410,800 in Q2 2025 – a 42% jump over the past decade.
Realtor.com estimates that a typical household now needs to earn about $118,530 to afford a median-priced home. Real median household income in 2024, when the latest data was available? Just $83,730, according to the Federal Reserve Bank of St. Louis. That is a wide gap.
Asked how far prices would have to fall to restore balance, Wright didn’t mince words: “It’s going to be close to 50% of you – and in some areas much more (1).”
This is a cool prospect. Given how much U.S. household wealth sits in home equity — and how many current buyers are enjoying it — a 50% drop would be devastating.
There are already signs of change. Zillow recently reported that 53% of US homes have lost value in the past year – the highest share since 2012 – with an average drawdown of 9.7% (3).
Wright believes the coming recovery could take several years to fully play out, but he thinks the recession could start as early as 2026.
“I believe we can start to see price declines in earnest next year and see a big decline historically speaking, but still think it could take several years to bottom out,” she told Newsweek (4).
He’s not the only one sounding the alarm. Treasury Secretary Scott Besant recently stated that the housing market is already in a “slowdown” due to Federal Reserve policy (5). And “Rich Dad, Poor Dad” author Robert Kiyosaki has warned that the “greatest crash in history” is about to begin – adding a “residential real estate crash” to this scenario as well.
If you share these concerns, now might be a good time to start preparing.
When storm clouds gather over markets, gold often reclaims the spotlight.
Long seen as the ultimate safe haven, gold is not tied to any one country, currency or economy. It cannot be created at will by central banks like fiat money and in times of economic turmoil, market turmoil or geopolitical uncertainty, investors tend to delay increasing its value.
The price of gold has increased by more than 50 percent in the last 12 months.
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, has repeatedly emphasized the importance of gold in a flexible portfolio.
“People don’t have enough gold in their portfolios,” he told CNBC earlier this year. “When bad times come, gold is a very effective diversification.”
One way to invest in gold that also offers significant tax benefits is to open a gold IRA with the help of Thor Metals.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.
To learn more, you can get a free information guide that includes details on getting up to $20,000 in free metals on qualified purchases.
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich).
The housing crash of 2008 didn’t just wipe out home equity—it sent ripples through the entire economy. Layoffs mounted, unemployment rates soared and families across the country found themselves suddenly disadvantaged. If the next big correction is coming, it’s worth strengthening your safety net before the ripple effect hits.
One of the most effective ways to do that is to have a cushion of readily accessible cash. If your income takes a sudden hit, that buffer helps you survive without taking on expensive debt or being forced to sell investments at the worst possible time.
So how big should that safety net be?
Personal finance expert Dave Ramsey suggests an emergency fund that can cover three to six months of living expenses. What’s most important, though, is consistency—adding a little at a time until your safety net starts to take shape.
To get started, a high-yield account, such as the Wealthfront Cash Account, can be a great place to grow your emergency fund, offering both competitive interest rates and easy access to your cash when you need it.
The Wealthfront Cash Account may offer a base variable APY of 3.50%, but Moneywise readers can get a special 0.65% increase in their first three months for a total of 4.15% APY offered by program banks on your uninvested cash. That’s more than nine times the national deposit savings rate, according to a September report from the FDIC.
With no minimum balance or account fees, plus 24/7 withdrawals and free domestic wire transfers, you can ensure your funds are always accessible. In addition, Wealthfront cash account balances up to $8 million are insured by the FDIC through program banks.
At the end of the day, everyone’s financial situation is different — from income levels and investment goals to debt obligations and risk tolerance. And when the economic outlook is uncertain, those differences become even more significant. If you’re not sure where to start, now might be the right time to get in touch with a financial advisor.
With Vanguard, you can connect with a personal advisor who can help you evaluate how you’re doing so far and make sure you’ve got the right portfolio to meet your goals on time.
Vanguard’s Hybrid Advisory System combines advice from professional advisors and automated portfolio management to ensure your investments are working to achieve your financial goals.
All you have to do is fill out a short questionnaire about your financial goals and Vanguard’s advisors will help you set a suitable plan and stick to it.
Once you’re set, you can sit back as Vanguard’s advisors manage your portfolio. Because they are trusted, they don’t earn a commission, so you can trust that the advice you get is unbiased.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
