The Biggest Housing Bubble In The Entire History Of The United States Is In The Process Of Bursting

February 12, 2026 by Michael



The housing bubble that burst during the Great Recession was enormous, but it was nothing compared to what we are facing now. Two decades ago, the average price of a home in the United States was about $140,000. Today, the average price of a home in the United States is above $500,000. We have literally never seen anything even close to a housing bubble of this magnitude. Unfortunately, what comes up must eventually come down.

Just like we witnessed during the Great Recession, home sales have started to crash.
In January, sales of previously owned homes were 8.4 percent lower than they were in December…
Sales of previously owned homes in January dropped a much wider-than-expected 8.4% from December to a seasonally adjusted, annualized rate of 3.91 million, according to the NAR. Sales were 4.4% lower than January 2025. That is the slowest pace since December 2023 and the biggest monthly drop since February 2022.
This count is based on closings, so contracts that were likely signed in November and December, when the average rate on the 30-year fixed mortgage didn’t move much before dropping slightly in January. That rate is now 6.1%, according to Mortgage News Daily.
Regionally, sales fell across the nation month to month but were down the most in the South and West.
Sales of previously owned homes have been at a depressed level for years, and now things are getting even worse.
It is a really bad time to be a real estate agent in America. So many really good agents are deeply struggling right now.
One of the primary reasons why home sales are so low is because home prices are way too high.

Over a 20 year period, the average price of a home in the United States increased from about $140,000 to more than $503,000…
While there have been periods of rising and falling home values, the end result is this: In the past 20 years, the average home price in the U.S. has grown from about $140,000 to about $503,800 as of 2025.
That is what a bubble looks like.
If you can believe it, the median value of a home in Montana grew by two-thirds in just four years…
Montana’s typical home value has increased by two-thirds in four years, according to new valuations published this month by the Montana Department of Revenue.
The department estimates that the median residential property in Montana was worth $378,000 as of the beginning of last year. Four years previously, before the state housing market blew up during the COVID-19 pandemic, the median value was $228,000 — meaning values have increased 66%.
What we have witnessed this decade has been absolutely insane.
As a result, 64 percent of all single Americans are now struggling to make their monthly rent or mortgage payments…
Nearly two-thirds (64%) of single people struggle to afford their regular rent or mortgage payments, compared with 39% of married people, according to a recent Redfin survey conducted by Ipsos.
These survey results in this report are from a Redfin survey conducted by Ipsos in November 2025, fielded to 4,000 U.S. residents. We consider survey respondents to struggle with housing payments if they selected “I struggle greatly to afford them,” “I regularly struggle, but sometimes okay,” or “I sometimes struggle, but generally okay.”

This state of affairs couldn’t persist indefinitely.

It was just a matter of time before something started to give, and now we are being told that home prices are falling in 26 of the 50 largest metro areas in the United States…
The sales slump comes as home prices are now falling in 26 of the country’s 50 biggest metro areas, according to recent report from Realtor.com..
This reminds me so much of what we experienced just before the crash of 2008.
And as I discussed yesterday, last month the number of foreclosure filings was 32 percent higher than it was during the same month one year earlier…
With the number of Americans losing their homes to banks rising for an eleventh straight month, it’s clear the housing crisis is getting worse rather than better. US foreclosure activity jumped again in January 2026, with a total of 40,534 properties facing foreclosure filings – a 32 percent increase from the same time last year. Foreclosure filings cover every stage of the process, from the moment a lender issues a legal warning to the point a home is formally seized after missed mortgage payments.
Do you remember what happened the last time that foreclosures spiked dramatically?
It is starting to happen all over again.
Every economic bubble bursts eventually.
Sadly, we live at a time when multiple bubbles appear to be bursting simultaneously.
Former U.S. Representative Ron Paul is warning that the entire system is on the verge of collapsing…
Former Texas Representative Ron Paul said the U.S. economic order rests on “fraud” rooted in the 1971 break from gold and warned that the current system is nearing its end, in a wide-ranging 90th-birthday interview on The Tucker Carlson Podcast released Thursday.
Paul, a Republican-turned-Libertarian-turned-Republican, tied his warning to the end of dollar convertibility into gold under President Richard Nixon, calling it the nation’s “first declaration of bankruptcy,” and argued that persistent money printing and deficits have created a brittle order primed for a severe correction.
In 1971, the median price of a home in the United States was $25,200.
In those days, just about anyone that was willing to work hard could afford a home.
At the end of 1971, the U.S. national debt was sitting at 398 billion dollars.
Now it is sitting at 38.5 trillion dollars.
Do you understand what that means?
The size of our national debt will soon be 100 times larger than it was in 1971.
Just think about that for a moment.
We really are in the end game.
We have destroyed the value of our currency and we are absolutely drowning in debt.
Now the economic bubbles that we have inflated are starting to burst all around us, and the days ahead are going to be filled with a tremendous amount of pain.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

The Biggest Housing Bubble In The Entire History Of The United States Is In The Process Of Bursting