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Why 2026 housing crash calls are wrong
Matt the Mortgage Guy and I outline the facts that a lot of folks are missing, and why we believe 2026 crash calls are off base.
Michael Zuber
December 12, 2025
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Why 2026 housing crash calls are wrong
If you only listened to the “Jerry Springer” corner of YouTube housing, you’d think 2026 is going to be a replay of 2008, only bigger, faster, and uglier.
But they’re flat-out wrong.
When you actually sit in the data every week—mortgage apps, delistings, wage growth, foreclosures, policy shifts—you see a very different picture taking shape. 2026 is setting up to shock a lot of people, just not in the way the doomer thumbnails promise.
That’s why this past week, Matt the Mortgage Guy and I outlined the facts a lot of folks are missing, and why we believe 2026 crash calls are off base.
1. Mortgage applications point to “demand,” not “doom”
Crash narratives usually begin with: “There’s no demand.” But the reality is, as of late November, mortgage applications are at their 2025 high—in winter, which is usually the slowest season.
Historically, apps peak in the spring and fade into the holidays. When you’re hitting new highs in the “quiet” months, that’s not a dead market; that’s pent-up demand waking up early. Mortgage applications are a leading indicator.
People don’t apply because they think prices are about to fall 50%. They apply because they want in before rates drift lower and competition picks up.
2. Delistings are turning into rentals, not a flood of inventory
Another crash line: “All these delisted homes will slam the market in spring.”
Yes, delistings have surged. But a big chunk of those owners are becoming accidental landlords, not waiting to panic-sell in 2026. They’ve got:
Ultra-low fixed mortgage rates
Decent neighborhoods and solid rental demand
The ability to break even or cash flow a bit
When the choice is “sell at today’s price and barely break even” or “rent it out and let tenants pay down the loan,” a lot of owners choose to hold. Those homes are leaving the for-sale pool for years.
If your crash thesis requires a giant spring inventory wave, you’re probably going to be wrong again.
3. Affordability, income, and policy are slow tailwinds—not crash fuel
It still feels expensive, but as of early December, national affordability is the best it’s been all year:
National prices have been roughly flat in 2025
Mortgage rates are lower than they were in January
We’ve had 29 straight months where wages have risen faster than inflation
This is the slow 1978 to 1996 style grind: a little wage growth, a little rate relief, cooler prices. There’s no magic pill—just steady improvement over several years.
On top of that, housing is a huge piece of the U.S. economy. The Fed has already stopped QT, a policy tool used to reduce the money supply in the economy and control inflation.
Moreover, the next chair is likely more open to rate cuts and balance-sheet support if needed, and there are serious proposals to cut tax burdens for certain households, boosting take-home pay and likely refunds in 2026.
Crash callers need things to keep getting worse. The actual trend is slow healing plus more disposable income, which is not a recipe for mass forced selling.
4. Foreclosures, DSCR, and Airbnb busts are pockets of pain—not 2008
Yes, foreclosures are up and may climb further. But we’re also coming off years of extend-and-pretend, where borrowers got multiple modifications and stayed in homes they couldn’t afford. Now the system is finally clearing that out.
At the same time, underwriting is tight: roughly 4 in 10 applications are being declined. We’re not mass-issuing 2006-style liar loans. Add in DSCR and Airbnb blowups—people who took loans at sub-1.0 coverage or underwrote fantasy nightly rates. Those bad bets are unwinding.
That’s not “the whole housing market is broken.” That’s “speculation is getting punished.” For disciplined investors—30-year fixed, day-one cash flow, conservative rents—this creates selective opportunities in pre-foreclosures, tired landlords, and bad DSCR deals.
It’s targeted distress, not systemic collapse.
5. Crash charts are cherry-picked drama designed to keep you sidelined
The easiest way to sell a crash is to zoom in on the peak and ignore the run-up. Think Austin: prices explode up, then give back part of the gain. If you only show the drop, it looks like a catastrophe. If you show the full move, it looks like a hot market overshooting and then normalizing.
Think of it like gas going from $2 to $3.50, then “crashing” to $2.60.
That’s what I call “Jerry Springer Housing Content:” maximum drama, minimum context. Great for ad revenue. Terrible if you build your entire financial life around it and spend years waiting for a crash that never comes.
The big picture
Will there be pain in certain corners—overstretched FHA buyers, bad DSCR bets, peak Airbnb plays? Yes. There always is. But pockets of pain are not the same thing as a 50% national crash or another 2008.
The real 2026 setup: solid underlying demand, limited for-sale supply, slowly improving affordability, localized distress creating investor deals, and policy that leans toward stabilization, not destruction.
Crash calls are entertaining. But if you want to build wealth, you can’t treat real estate like a YouTube show. Know your buy box, stick to conservative financing, insist on day-one cash flow, and let the data—not the doom thumbnails—drive what you do next.
ResiClub chart of the week:
This week, ResiClub’s Lance Lambert mapped where active housing inventory has already reset to, or even surpassed, its pre-pandemic levels—and where it’s still tight.
Lance reported that while active housing inventory is rising year-over-year in most of the country, it’s still tight-ish across big chunks of the Midwest and Northeast—places where both resale listings and new homes for sale remain scarce.
In contrast, active inventory has neared or exceeded 2019 levels across much of the Sun Belt and Mountain West, including metros like Punta Gorda, Tampa, and Austin.
At the end of November 2025, 18 states were already sitting above their pre-pandemic active inventory levels:
Alabama
Arkansas
Arizona
Colorado
Florida
Georgia
Hawaii
Idaho
Nebraska
Nevada
North Carolina
Oklahoma
Oregon
South Carolina
Tennessee
Texas
Utah
Washington
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