The U.S. housing market might be on the brink of a dramatic downturn, potentially surpassing the severity of the 2008 crisis, with property values possibly slashing in half within a few months, according to a housing analyst.

Melody Wright expressed her fears about plummeting home prices in a recent interview with Adam Taggart on the Thoughtful Money podcast.  

During a discussion about a new Zillow study, it was revealed that home values are declining in over half of the U.S., marking the largest proportion since the nation was recovering from the Great Recession.

The statistics indicate that 53% of American homes have depreciated in value over the past year, a figure not seen since 2012 when the housing market reached its lowest point.

Analyst Wright cautioned that this trend suggests an imminent market correction that could be even more severe than the 2008 housing bubble burst.

She stated, “I believe we’ll see an adjustment until the median home price aligns with the median household income.”

‘So that is going to be worse than 2008. This could devolve a lot faster than last time.’  

She explained that homes have lost value in 2025 since the pandemic era housing market boom because people are not buying at the same rate. 

Housing analyst Melody Wright predicted the market could face a price correction ‘worse than 2008’

Data showed that 53 percent of US homes have lost value over the past year, the highest level since 2012, when the housing crash finally hit bottom

Wright said economic uncertainty during Donald Trump’s tariff war earlier this year caused a lot of buyers to have ‘cold feet,’ and the only purchases that happened were for higher-priced homes. 

‘You have this bifurcated housing market, but the majority of folks transacting are in these upper tiers, so your median [home price] is going to be higher,’ she said.

‘However, what I’ve been seeing over the last three months, and this is – I get into the dirty dirty details – underneath the covers, that $100,000-$250,000 sales price, we are starting to see incremental increases in sales in that category.

‘And so as it continues, it will start to drag the median down. It’s happening already and that’s where we’re seeing the deceleration.’

Wright noted that the housing market is ending the year with ‘flat’ price growth, and predicts that 2026 is ‘going to be worse.’

Some commenters accused Wright of fearmongering, or even thought she was being too optimistic about the price of homes dropping.

‘I wish I could believe house prices will go down. I’ve been listening to this narrative since 2020,’ one person wrote on YouTube.

‘I so hope they drop by 50 percent and stay there, so young people can afford them and start having families again,’ added another.

‘They need to drop 50 percent because they went up 100 percent in the space of two months during the Spring of 2020 in my area,’ wrote a third.

Other experts disagree that the market will tank, but think housing prices are normalizing after the pandemic 

Zillow stated that while the pullback feels alarming, it’s not a sign of another crash, but rather a ‘normalization.’

‘Homeowners may feel rattled when they see their Zestimate drop,’ said Treh Manhertz, a senior economic researcher at Zillow. 

‘But relatively few are selling at a loss. Home values surged over the past six years, and the vast majority of homeowners still have significant equity. What we’re seeing now is a normalization, not a crash.’

Chris Reis, a broker with Compass in Seattle, told the Daily Mail he firmly disagrees with Wright’s prediction.

‘The market today could not be more different. We have a severe housing shortage, lending practices are significantly more stringent, most homeowners have significant equity in their properties and rates locked below four percent. 

‘There simply won’t be a need to panic sell like there was 2008,’ Reis said.

‘I’m not saying the market is perfect right now. Affordability is a serious problem, especially for first-time buyers.

‘But the solution isn’t going to come from a market crash – it needs to come from policy changes to increase supply and continued rate normalization.’

He warned buyers hoping for major price drops that they will be waiting a very long time. 

‘Markets move in cycles and there will always be corrections. But the structural issues that caused the collapse in 2008 just aren’t present. Anyone waiting for prices to drop in half will be waiting for a very long time,’ Reis said.