Housing analysts are pushing back against fears of an imminent market collapse.

In comments reported by Newsweek, experts said the U.S. housing market is more likely to enter a normalization cycle than a systemic crash, even as affordability strains and demographic headwinds persist heading into the spring buying season.

Normalization, Not Collapse

“A 2026 housing crash? Not likely,” said Michael Ryan, finance expert and founder of MichaelRyanMoney.com. “A crash is a complete system break forced selling, credit freezing, foreclosure waves, panic spiraling on itself. That’s not what the market is showing right now.”

Ryan described current conditions as a reset, noting that mortgage rates are hovering around 6.3%. He said forecasts cited in the report, including projections from Zillow Group Inc. (NASDAQ:Z) and Redfin, point to roughly 1% national appreciation, a picture of stagnation, not collapse.

Zillow's March forecast projects home values rising approximately 0.7% year over year by the end of 2026, with existing home sales reaching about 4.24 million transactions.

Easing mortgage rates and growing inventory are expected to bring supply and demand into closer alignment, though sales volumes are projected to remain below historical norms.

Affordability And Demand Pressures

Kevin Thompson, CEO of 9i Capital Group, said a shift in buyer psychology is helping activity open back up. “People are beginning to accept that today’s rates are more normal than what we saw over the last few years,” he said.

Not all analysts are dismissive of downside risk. Drew Powers, founder of Powers Financial Group, cited an aging boomer population, a stagnant employment market and potential AI-related layoffs as forces that could put downward pressure on prices.

“Home prices have skyrocketed, and at some point, the bubble has to burst,” Powers said. “Timing the correction always proves to be the hard part.”

Unlike the mid-2000s housing bubble, today's market is underpinned by stricter lending standards and persistent supply shortages, conditions that analysts say make a broad market collapse unlikely under current conditions.

Policy Support And Market Implications

Policy is moving to ease barriers at the margin. President Donald Trump signed an executive order on March 13 directing regulators to revise Ability-to-Repay and Qualified Mortgage rules, ease compliance burdens on community banks and modernize the mortgage process through electronic signatures and AI-based appraisals.

The administration said its $200 billion in mortgage-backed securities purchases has lowered the cost of a new mortgage by $5,000. Stocks tied to digital mortgage infrastructure, including Rocket Companies Inc. (NYSE:RKT) and DocuSign Inc. (NASDAQ:DOCU), have been in focus following the regulatory shift.

“What we’re seeing instead is a normalization cycle,” Ryan said. “Some local markets will hurt, but nationally this looks more like a cold market than a breaking one.”

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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