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Why Waiting for a Housing “Crash” Is the Wrong Answer to Affordability – Emilio DiSpirito
By Emilio DiSpirito IV, Private Office Advisor & License Partner, Engel & Völkers Oceanside
Every few weeks, I hear the same argument—online, at open houses, and in casual conversations: “I’m waiting for the housing market to crash. That’s the only way homes will be affordable again.”
I understand the frustration. Prices feel high. Rates are higher than they were a few years ago. Buyers feel pressure. But when we step back and look at the data—without emotion—the idea that a broad housing crash would “fix” affordability simply does not make economic sense. In fact, the evidence shows it would be deeply negative for far more Americans than it would ever help.
Most Americans Are Homeowners—and Their Equity Is the Backbone of the Economy
About 65% of U.S. households own their homes. That is not a small or elite group; it’s the majority of American households.
The average homeowner with a mortgage today holds roughly $300,000 in equity, and collectively Americans hold over $17 trillion in home equity. This equity is not abstract or speculative. It is:
When people call for a “crash,” what they are really calling for is the destruction of this foundation for tens of millions of households.
Housing crashes are not precise tools. Mortgages don’t shrink when prices fall.
If home values were to decline broadly:
That loss does not land primarily on banks or institutions. It hits everyday Americans—teachers, nurses, tradespeople, retirees, small business owners—many of whom rely on home equity for stability and mobility.
Crashes don’t create opportunity; they create collateral damage.
The Buyer Pool Is Smaller—and More Fragile—Than People Think
The common rebuttal is: “That’s fine, because buyers will finally be able to afford homes.”
But let’s be honest about who those buyers actually are.
If we define a “ready” buyer as someone who:
That group is far smaller than the homeowner population—and many of them already own homes.
More importantly, crashes shrink this group, not expand it. Historically, housing downturns come with:
Many people who believe they’ll benefit from a crash discover they are less qualified to buy once it arrives.
People often reference the 1950s as proof that housing used to be “affordable.” But when you adjust the numbers properly, the story changes.
In the mid-1950s:
That means a $50,000 household income today is not “low” by historical standards—it’s roughly equivalent to a median household income in the 1950s.
What made housing affordable then wasn’t cheap money or market crashes. It was:
A crash today does not recreate those conditions.
Affordability Is a Supply and Structure Issue—Not a Crash Issue
True affordability has never come from destroying demand. It comes from balance:
Today’s challenges are structural:
Crashing prices does nothing to solve these issues. It simply weakens balance sheets while leaving the root causes untouched.
Housing Is More Affordable Than Many People Realize
Affordability is often misunderstood because people focus only on prices, not capacity.
For households with:
Homeownership remains attainable—especially when buyers focus on entry-level housing, townhomes, condos, and smaller single-family homes, rather than comparing themselves to peak-market purchases or luxury listings.
The issue isn’t that housing is universally unaffordable—it’s that expectations and supply are misaligned.
Historically, homeownership has been most attainable when people formed households earlier—getting married, having children, and buying homes in their late 20s or early 30s. Bringing the average age of first-time buyers back toward 30 is achievable—but not through economic destruction. It happens through stability, opportunity, and supply.
Wanting housing to be more affordable is reasonable. Rooting for a crash is not.
A broad housing crash would destroy trillions of dollars in middle-class wealth to potentially help a much smaller group of buyers—many of whom would not be able to buy once the crash dynamics set in.
The data is clear:
You don’t fix housing affordability by breaking the financial foundation of the American middle class.
Real affordability comes from thoughtful policy, increased supply, realistic expectations, and long-term stability—not from hoping for economic pain.
That’s the conversation we should be having.
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Emilio DiSpirito is a Private Office Advisor, License Partner of Engel & Völkers Oceanside, developer, investor, and host of The Wealth Architect Podcast. Ranked in the top 1% globally at Engel & Völkers with over 1,500 families served and $750M+ in closed sales, Emilio is also the featured real estate expert for WPRI’s The Roadshow and a contributor to RINewsToday.com. Recent interview on WPRI’s the Rhode Show about this topic can be seen here: https://www.wpri.com/video/welcoming-emilio-dispirito-from-the-dispirito-team-at-engel-v%C3%B6lkers-the-rhode-show/