Will Home Prices Crash in 2026?

Housing prices have been increasing for the past decade, with median home values soaring to record highs in 2021. While the market has cooled slightly, high mortgage rates and low inventory have kept prices out of reach for many across the country. There may, however, be hope on the horizon.

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Housing expert Graham Stephan recently told his 4.75 million YouTube subscribers that a housing crash may be coming in the next couple of years. In a video entitled “ Why Home Prices Will Crash in 2026, ” he explained that the conditions are ripe for a reduction.

Here is what you should know about market predictions and whether you should buy now or wait for a crash.

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What’s Happening With the Housing Market?

Graham Stephan, a seasoned realtor and self-made millionaire, recently told his followers that a housing crash may be coming in the near future — two years to be exact. Right now, however, home values remain high, particularly in big metros.

As he discussed in his recent YouTube video, there are “record high values, constant increases and the worst affordability in 40 years.” But some markets are finally starting to decline. Inventory increases and less demand are likely to be blamed. While this isn’t true across the country, as some markets continue to see higher prices, it is a trend worth watching.

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Understanding Seasonality

Graham noted that buyers and sellers need to first understand seasonality. He explains that “real estate generally tends to follow a very predictable, cyclical pattern of peaks and valleys where prices rise and fall on a rather consistent basis.”

This pattern occurs because more people buy homes during the spring and summer, while sellers tend to take their homes off the market during the winter. The increase in demand during these months drives up the cost of homes. In most cases, the price increase is between “8% to 12%” of the sales price but can be over 20%, depending on the location, Graham said. The seasonal uptick in home values occurs each year, particularly between June and August.

What Is the 18-Year Cycle?

Another predictor of home prices that buyers and sellers should consider is the “18-year cycle.” The trend of the 18-year cycle can be traced back through the 1800s. Graham noted that British real estate economist Fred Harrison used this information to correctly guess the past two market crashes over a decade before each actually happened. Harrison has predicted the next crash will occur in 2026 .

Where Are Housing Prices Falling the Most?

In the video, Graham said that housing prices are falling the most in Florida and Texas. These states each saw an incline in the number of people moving to them, increasing housing demand and resulting in new construction. The boom, however, led to “oversaturation” in some instances. This created “more supply than demand” and is likely the catalyst behind these falling housing prices. But rising inventory has affected markets throughout the United States, including Manhattan.

How Shrinkflation Affects Prices

The final trend Graham talked about is “shrinkflation.” For decades, the size of homes grew, increasing their price. Now, with soaring construction costs and declining buyer affordability, the trend may be reversing, with smaller houses becoming more popular.

Builders, Graham explained, are focusing “their efforts on creating more starter homes,” which helps to drive down prices. Unfortunately, insurance prices remain high, with many homeowners paying substantially more than they did in the past. There is also uncertainty about how lower interest rates may affect the market. Lower rates could prompt more sellers to place their homes on the market, creating more inventory — or drive up prices as more buyers take advantage of the reduction.

Should You Buy Now?

As for whether you should purchase now, Graham advised, “In this market only buy a home that you intend on keeping for at least 10 years that you could comfortably afford.” He advocated renting for individuals who only plan to live in a home for the next one to seven years since it is more cost-effective overall. “Don’t rush to buy something just for the sake of buying something,” he said.

This article originally appeared on GOBankingRates.com : Will Home Prices Crash in 2026?