Dave:
There’s a prominent theory originated by real economists, not just rogue YouTubers, that the real estate market runs in 18 year cycles and at the end of each cycle there’s a crash. And according to proponents of this theory, it accurately forecasted the 2008 crash. And now in 2026, exactly 18 years after 2008, the cycle is coming to an end yet again today on the market, we’re digging into the 18 year housing cycle theory and what, if anything, it can tell us about the future of real estate. Hey everyone. Welcome to On the Market. I’m Dave Meyer, chief Investing Officer at BiggerPockets. I’m also an investor and analyst, and these days I find myself a housing market theory fact checker, and today I’m digging into a theory about real estate markets that has existed for almost a century and according to proponents accurately called the last two real estate downturns in 2008 and previously in 1990, the theory is called the 18 year housing cycle, and it is true that one of the big proponents of the theory, Fred Harrison, a British economist, actually called the 2008 housing crash in 1997, a full 11 years before it happened.
So naturally, because of that accurate prediction and some economic research into the topic, people are rightfully wondering if we’re about to see the big decline at the end of this cycle. After all, it is now exactly 18 years after 2008, and there are some very famous, very popular YouTubers, people on the internet who talk about economics and housing, and they’re pointing to this data to support their forecast about housing market activity in the coming years, most notably saying that we’re due for a crash. And it’s not just people on YouTube. Even the Cato Institute talks about this, and I saw it actually being discussed on a Harvard University website. This theory has some legs. So today on the show, we’re digging into the 18 year housing market theory and breaking down what it can and cannot teach us because spoiler here, there is a little of both here, in my opinion.
It’s not all right, it’s not all wrong, but there’s a good amount that we can learn and take away from this research. So today on the show, first we’re going to just cover the theory itself. Then we’ll talk about how it came to be its track record in predicting cycles, what proponents say and detractors say, and then I’ll give you my own personal opinions about this theory and what can be learned from it. Let’s dig in. Alright, so here’s the theory. The 18 year housing cycle theory goes a little bit like this. Land is finite. You can’t make any more of it when demand goes up, which makes it prone to speculation. And when there is speculation and people are pouring money into land and real estate, eventually prices, outrun incomes, you might notice that is going on right now. That does happen, and then when no one can afford land or property anymore, the bubble pops.
So that’s the basic logic behind the theory, but let’s dig into sort of the different phases of the cycle that exist at the end of the previous crash. That is when the next cycle starts. This is when land prices are cheap, right? This is the beginning of the cycle where things are really inexpensive and that affordability is really what starts a recovery process. People can afford property again, they start buying things, vacancies on rented land start to fill up. Banks start to feel a little bit better about things. Credit starts to loosen up so people can buy a little bit more and more. As this is happening, developers see that things are getting better and they start to build. They see that the cycle is starting again and they start to add more inventory. They start to develop land. We see this all the time according to the theory.
This takes about the first seven years of the 18 year cycle. You’re seven years in, developers are starting to build and at that point there’s a little dip according to the theory, right? Seven years in, people are saying, ah, things have been growing for a while. Time to pump the brakes a little bit and you see a dip in prices, a dip in activity, not quite, but roughly halfway into the cycle. But then after that little dip, this little pause that goes on, the theory says that there is an explosion. It’s sort of this boom stage where for another 7, 8, 9 years, there is just massive speculation. People are just pouring money into the market. You sort of lose touch with the fundamentals. Prices go absolutely insane, and then after many more years of that, about 14, 15 years into the cycle, according to the theory, prices become unsustainable and then they crash.
And that’s the cycle, right? This cycle happens on repeat every 18 years according to this theory, and it sort of makes sense, at least logically, right? It actually is, in my opinion, quite similar to research that exists and theories about markets and economic cycles in general. This isn’t, in my opinion, super unique to real estate. If you look at just the business cycle in general, you see a relatively similar pattern. Each cycle starts at the end of the last one at the crash period, there is an expansion, then there’s a peak, then there’s some sort of recession and the market starts all over again. But this theory goes beyond just the general business cycle and claims to at least have more specificity. The theory has actually existed for a long time. It was first introduced by a guy named Homer Hoyt. He was an economist at the University of Chicago and back in 1933, he released a paper after studying land prices in the Chicago area from the 18 hundreds up until 1933.
But since then, even since the 1930s, this theory has prevailed. It has been carried on by other economists. A guy named Fred Berry used it to make some accurate predictions and most recently and most notably by an economist named Fred Harrison, who forecasted the recession of 19 91, 8 years before it happened using this theory, and he also famously called the 2008 housing market crash back in 1997. So this is why the theory has so much legs right now is that this guy has called the last two downturns, 1990 just for reference, was a lull in the housing market. Prices did go down a little bit. Obviously we all know what happened in 2008, but this guy, Fred Harrison, has been using this theory and has predicted the last two crashes, and so that’s why people are paying so much attention to this right now. Now, I should mention, and we’ll get to this more, that this guy, Fred Harrison does have a new book out and he predicts that peak housing is coming in 2026, which is why again, people are talking about this right now.
Now of course, me being, me being a data analyst, I did not just want to take everyone’s word for it. I wanted to actually go and find the data about these cycles and see if this pattern actually exists for myself, and I did find the data. Basically, it goes back to 18. 18 was the first time we saw this data that land peaked. Then again in 1836, exactly 18 years later, we did see land peak again in 1854. Exactly 18 years later, we saw it peak again. Then the numbers go off a little bit, but it’s still roughly 18 years, give or take a year or so. We saw it again in about 18 72, 18 90, 19 0 8, and then in 1925 again, so when you look at that, it’s kind of compelling, right? You look at this, and it’s pretty darn close to 18 years for about a century Now, from 1925 to today though the last a hundred years, the data is a little less compelling, so there really wasn’t a peak in land pricing and it doesn’t follow the cycle at all in the 1940s.
If it was 18 years, exactly, you would’ve seen this happen right in the middle of World War ii. Now, proponents of this theory say that the war sort of threw the cycle off and then it started again in 1973, but as we’ll talk about later, that is a 50 year gap where the cycle does not repeat. But in 1973, land prices did peak again and they did peak again in 89. That was 16 years, but proponents of the theory again, say it’s pretty close, and then we saw it again in 2006. I know people say 2008, that’s when the financial crisis happened, but land and home prices actually did peak in 2006. It was roughly 16, 17 years again, and now we’re roughly close to that. But if you believe the theory every 16 to 20 ish years, with the exception of those 50 years from 1925 to 1973, a pattern does repeat.
Again, it’s not exactly 18 years, but proponents of the theory think that this average is cult enough to make these types of predictions. So if you follow this data, it follows that a crash would come right now and it has somewhat accurately predicted the last two crashes. Now, there’s a lot to break down here, but before I give you my personal take on it, I want to share with you some other research about what other experts say about this, both in support of the theory and against this theory, and we’re going to get to that to determine does this actually have legs? Does this mean there is going to be a crash here in 2026 because the cycle has ended? We’re going to get to that right after this quick break.
Welcome back to On the Market. I’m Dave Meyer getting into the 18 year housing cycle. We’re talking about this because it seems to be a lot on YouTube. It’s in the BiggerPockets forums in the communities right now. People are talking about this, and I shared before the break the history of the theory and some of the data that does show that going back 200 years, there is some evidence that there is a pattern that repeats somewhat regularly. There are some exceptions. It is not perfect data, but there’s enough that we should break this down. So let’s look at the arguments for and against this theory, and we’re going to start with the arguments for, I looked hard for a lot of evidence of it, and basically the main thing, the piece of evidence that people point to is the prediction of the 2008 crash. This is what proponents say over and over again is the reason that there’s going to be a crash in 2026 because it was an impressive call.
I mean, if you called that in 1997, that seems like you’re an oracle. You have the crystal ball that we all talk about because you kind of nailed it and people think that if they predicted it once, it will happen again. The other piece of evidence that people point back to was that it really was fairly accurate. There was a regular cycle of land values peaking and crashing in the 18 hundreds. That part is true. If you look at 18, 18, 18 36, 18 54 and so on, it was pretty darn close to 18 years for honestly about a century. That pattern really did exist. Now using that pattern and frankly that pattern alone, Fred Harrison, the proponent who the guy who made those two calls is saying that there is going to be a crash in 2026, and he said it will be worse than 2008. So that’s basically the theory for it.
What about the arguments against it? Well, there are a couple. The main ones are, number one, the giant gap in evidence from 1925 to 1973. It’s a pretty big gap in my opinion. That’s nearly 50 years without evidence of the cycle. Now, proponents point to World War II is the reason for that, but it is still, even if you believe that, that’s a long time without the pattern repeating and then without, frankly, a lot of evidence. Proponents say that it started again in 1973. That’s not really true. There was a peak in 1973. Then it kind of peaked again in 1979, and so that was only a six year gap. Now, there is debate among proponents about if this happened and whether it happened, but basically from what I found, they can’t really explain it in any convincing terms. The next argument against it is that it’s not precise.
It’s not actually exactly 18 years. For a couple of years in the 18 hundreds, it was really 18 years, but it’s kind of just an average, which opponents say defeats the entire purpose of the measurement in the first place because if you’re using this to make investing decisions or to predict the cycle, the difference between 15 or 16 years and 20 years kind of matters, right? If you get out of the market too soon, you get into the market too quickly. Kind of defeats the point. Imagine someone saying that the stock market crashes eight years and you acted on that and it didn’t turn out and they said, oh, well actually that’s just an average. Sometimes it’s five, sometimes it’s 10. Kind of loses the purpose, right? What good is it if you cannot actually use it to make investing decisions? It kind of doesn’t matter.
Another argument against it is that the theory does call for mid cycle dips, and that didn’t really happen this cycle, right? If prices crashed in 2008, they bottomed in 2011, you would’ve expected some dip in housing prices during the 2010s. There was a little bit for kind of a minute in 2008, but not really according to this theory, so it didn’t really hold up there. So those are the arguments for and against it, and honestly, you can have your own opinion about this. There’s no right or wrong here. It’s just a theory. There’s no law here, so I will give you my opinion. I spent a lot of time researching this and basically where I come out on this is there are some things that we can learn from this cycle, but not everything. For example, will nominal home prices peak in 2026, and by nominal I mean non inflation adjusted prices.
This is what you see on Zillow or realtor or whatever. That’s a nominal price. Will they peak in 2000? Yeah, I think so. I’ve said that for a while now. I actually think we’ve been in a correction for a little bit because real home prices have been pretty flat, but amazingly, I actually do think the theory is probably going to be pretty close on this one, and we’re going to see nominal home prices peak for this cycle in 2026. That shouldn’t be news to you. If you listen to the show, I’ve been saying it for a while, I expect prices to be pretty flat this year. I don’t expect them to go up if they do a little bit, and if anything, I’m leaning on the side of one 2% nominal home price declines this year, and so the theory amazingly, somewhat, I think might be kind of accurate on this.
That is one big part of this to pay attention to in general. I also agree with the idea that land is finite. Then speculation does happen in the housing market. That absolutely does happen. There is this term irrational exuberance that does create asset bubbles. It’s usually fueled by debt, and corrections do happen because people start overpaying for things. This is just true. If you look at history, asset bubbles do exist. They do happen in cycles, but they’re not really unique to real estate. These cycles exist in most debt back markets. They certainly happen in the stock market. We even see them in art markets or collectibles markets. These kinds of cycles do exist, and that is something that we can learn from. Actually, if you know J Scott, he’s a regular contributor to show he is written a lot of books. I co-wrote real Estate by the Numbers with him.
He put out a great book, recession Proof Real Estate Investing is what it’s called, and he talks all about the business cycle and how there are different cycles in real estate and how what you should be doing as a real estate investor should change based on where we are in those cycles, and I 100% agree with that. If you are in a recession, you invest differently. If you’re in an expansion, you invest differently If you’re in the peak or the trough, you have to do different things in your investing decisions based on what’s going on around you. That’s the whole premise of this show is that we are talking about what’s going on in the market. We’re talking about data and economics so that you know what to do with your investing with your portfolio based on where we are in the market cycle. I highly recommend if you have not read that book, it’s a really quick read.
It’s a pretty slim little book. If you just want a primer on how to behave in different parts of the market cycle, check out Jay Scott’s book, recession Proof Real Estate Investing. I highly recommend it. You can get it BiggerPockets, Amazon, wherever. So those are two things that I take away from the theory cycles are real. They absolutely are, and it might be right this year, right on 18 years, if you time it from 2008 to now, it might be right peak prices actually were in 2006, so I think we’re about 20 years out, but proponents of the theory say that this year is going to be the time that it corrects, and I think we are already in that correction, so I do agree with that. Again, that said, I do not buy the idea that real estate works in precise cycles of exactly or honestly, even roughly 18 years.
Economics just don’t really work that way. It ignores the human element of the market. It ignores geopolitics. It ignores government intervention to help prop up the economy and it ignores new policies that exist and are always being introduced into the market. It just doesn’t happen like that. Even if you look at theories of recessions, right? A lot of people say that the broader economy operates on a seven year cycle and that is the average, but guys, an average is a conglomeration of tons of data. There are years that it’s five, there’s years that it’s 11. There’s years that it’s two. That is an average and an average is not a forecasting tool. You cannot say because the average has been there’s been a recession every seven years on average that it’s going to happen exactly seven years from the last one. It doesn’t happen like that.
Just look at this. I mean, yes, we kind of in theory had a recession in 2020, but from the time the last one started, that was 11 years, some people thought we were in a recession in 2022. Some people think another one’s coming this year. The reality is you actually have to look at the evidence on the ground that is going on in front of your eyes to make predictions. You cannot just say it happens like clockwork every seven years. I think everyone logically understands that it probably just doesn’t work that way, and if you break down and examine this theory in more detail, it kind of breaks down. Look at the evidence. Since World War ii, there is this massive gap between 1925 and 1973. That’s nearly 50 years where the cycle did not repeat. Then from 1973 to 1989, the next cycle that proponents of this theory site is only 16 years.
It’s not 18. Then the next one is to 2006, people call 2008, but again, housing peaked in 2006. That was only 17 years and now we’re in 20, 26, 20 years later and there hasn’t been a crash. Yes, there is a cycle, but it is not precisely 18 years and since 1925, it’s actually never been exactly 18 years. In fact, the only real evidence for a precisely 18 year cycle actually comes from the 18 hundreds. Just let that sink in for a little bit. It’s from the 18 hundreds. I think we can all agree that things have changed a little bit since then. We are no longer an agrarian economy. We’re speculation drives the real estate market. There are still some patterns that exist, right? Property still has speculation. Absolutely. I’m not arguing with that, but land speculation, which they cite in the 18 hundreds as the core of this theory is not really what’s going on in the market.
Back then, we didn’t have a central bank. We didn’t have long-term fixed rate debt like a 30 year mortgage. We didn’t have a fiat currency. There are so many differences between the economy today and the housing market today and what was going on in the 18 hundreds. Frankly, I don’t really think that data is relevant anymore. It’s kind of like if someone started telling me that at 38 years old, that’s how old I am, I had reached my full life expectancy in the United States because that’s what the data from 1850 told us. That was life expectancy in the 1850s, but I don’t take that too seriously because just so much has changed with the medical system and reality. Just like so much has changed with the housing market and the economy, we can’t really rely on data and patterns from the 18 hundreds. So much has changed.
That data was good when it existed back in that kind of economy and that reality, that data did make sense. If I was sitting here in 1880 and someone said, Hey, there’s an 18 year housing market cycle, I might take it more seriously, but in 2026, I am not banking my own real estate investing decisions based off of data from the 18 hundreds. Okay, so that’s one thing. The data is fuzzy at best. Next, let’s talk about real versus nominal home prices. This is my favorite thing to rant about recently because it’s important, but basically people are saying that housing prices are going to crash or peak this year and start declining in nominal terms. That might be true, like I said, but as an analyst, what I try and look at a lot is real home prices. This is inflation adjusted home prices, and when you look at it that way, the cycle actually already ended.
Home prices have not been going up in real terms for the last three years. In fact, if you look at it, home prices have been pretty flat for the last three years in real terms. Now, I know you have been seeing prices rise on Zillow and Redfin because those are nominal. They are not doing inflation adjusted terms, but if you do it the way that I think you want to, if you were predicting cycles for you as an investor, if you want to look at things in nominal terms, go ahead and do it. That makes total sense. But for predictions, if you actually look at the way real estate cycles works and trust me, I I do all the time. If you look at the way cycles work, real home prices, inflation adjusted home prices are a much, much, much better predictor of where the cycle is than nominal home prices and if you look at that, we’re in the flat part of the cycle.
It actually ended three years ago. That’s another reason I don’t really buy this is that it uses nominal home prices, which doesn’t really tell you the true genuine change in home prices that I think we as investors need to be paying attention to because that’s where the alpha comes from. That’s where you actually get these huge gains in wealth and value is when real home prices change and this uses nominal home prices. One other thing I just want to mention is that back in the 18 hundreds, it was a much weaker federal government. They were not as interventionist in economic cycles as we are now, for better or worse, both sides of the aisle do this. It has become politically untenable to have a recession or especially a housing crash. That is something that politicians will avoid at all costs. They will implement policies and stimulus and quantitative easing or whatever they got to do to try and keep these things going up, and so that is another reason I don’t really buy into this theory is that we just have a more interventionist government than we had when this data was accurate, and so that’s another reason to think that the cycle working on perfect 18 year increments is probably not true because the government is devoted to extending that cycle as long as possible.
I don’t personally think they can do that forever. I think it actually increases the long-term probability of bubbles and crashes, but that is just what they’re doing. I don’t think it’s a good idea, but that is what they do. So that’s my general take on the theory. If you want to learn something from it, learn that the housing market operates in cycles. They might be right that nominal home prices will peak this year. I personally think that is correct, but I personally put almost no stock in the number 18. I do not think that 18 is magic, just like I don’t think there are recessions every seven years as a housing analyst. I just have seen too much data. I know that it doesn’t work this way and I don’t think that you should take really any stock in the number 18 and you’re much better off listening to the show or reading a newsletter or whatever, figuring out what’s going on in the market today and where we are in the cycle for yourself.
That is the most important thing that you can do if you want to time the market. Now, I personally don’t time the market in a way where I’m like, oh, I’m getting in or out of the market, but I do change my tactics based on where we are in that cycle and I recommend that you do too. That’s just smart investing, so that’s another theory, but I do want to talk about one more topic. The theory says that prices will go down and I actually agree, but Fred Harrison has said in 2026, the market correction that is coming will be a crash quote worse than 2008, and I want to get into that because if I agree that housing prices are going down, does that mean we’re going to see this catastrophic crash? We’re going to get into that right after this quick break. Stick with us.
Welcome back to On the Market. I’m Dave Meyer going over the 18 year housing market theory. I’ve talked about what you can learn from this mainly that there probably will be home price declines this year at least. I think that that’s my base case at least a little bit, and that the market absolutely does work in cycles fueled by speculation and debt and unaffordability, and there are evidence of some of those things right now we do have low affordability. We have had prices run up in a massive way, so there is reason people are looking at this theory and saying, Hey, I actually see evidence that this is repeating again, and some of the most diehard proponents are saying this means that we’re going to see a massive crash worse than 2008. Now, I want to dig into that a little bit because I don’t believe that just because I am saying that they might be right, that 2026 is the peak phenomenal home prices for this cycle.
That does not mean I am predicting a crash, and frankly, when anyone says that the next cycle is going to be worse than 2008, when someone says that it’s just nonsense. I’m sorry. There is no data, there is no evidence that suggests this is happening. It is just to get attention and nothing more. There is no one I know, not a single respected economist or forecaster who’s looking at data on the ground stuff that’s happening today and says, I see a crash coming. Instead, it is people pointing to theories like this that are overly simplistic. Use data from the 18 hundreds for fearmongering. That’s it. Pure and simple. It is fearmongering. People want there to be a crash or they want attention and they’re using this theory of 18 years that was accurate in the 18 hundreds to scare people. That is basically what I think is going on, but I’m not just going to say that and denounce them.
I’m actually going to share with you real information and real data about what is going on that supports my belief that we are in a correction and not a crash. 2008 was a crash that was fueled by speculation. That is absolutely true. We saw wild speculation in the early two thousands and that was made much worse than normal. Speculation is something that happens in the housing market and there are corrections to correct that, right? That’s the definition of a correction, but what got so bad in 2008 is that speculation was able to get far worse than it ever should have because people were giving away ridiculous loans that they shouldn’t have given away. If you’ve heard of the Ninja loan, it’s no income, no job. There was no income verification on a lot of these loans, and so people who could not afford to speculate were speculating, and that is what created the crash.
It built stuff up so much and it allowed people who could not afford to take a hit on their speculation. Sometimes investors speculate knowing that it’s risky, but in 2004, 2005, 2006, the way that worked in the United States, it allowed people who did not really qualify for this kind of speculation to get into it, pump up prices higher than they could ever been, and then when property values went down and adjustable rate mortgages kicked in, people could not pay their mortgage that was essential to the crash. One, the debt that they shouldn’t have, and two, that most of these people could not service their debt. Once their adjustable rate mortgages happened, they were giving away these loans saying, Hey, come in 0% interest rate, 2% interest rate for the first year. Then during the crash, those interest rate adjusted to five, six, 7%. No longer could these people afford these loans because they could never qualify for these interest rates in the first place.
They stopped paying their mortgage, they got foreclosed on that had an influx of supply to the market, and that’s what caused the actual crash. That did happen in 2008, but the idea that markets always crash at the end of the cycle, it’s wrong, and it’s honestly, in my opinion, the invention of the media or particularly social media. I don’t think even 20 years ago, 30 years ago, people were talking about housing crashes because it’s happened once since the Great Depression, and that was 2008. The idea that a cycle ending means a crash is not accurate. The stuff that happened that I just described in 2008 to make that cycle very unique is not happening right now. Could it happen again? Yes. Could something else happen that make the next cycle or this cycle result in a crash? Yes, absolutely, but the idea that all cycles end in a crash is absolutely not true.
The downturn that Fred Harrison predict in 1990 wasn’t a crash. It was a correction. Prices were down for six quarters and they were down just a little bit in real terms, so it was not a crash. That was a normal correction, and frankly, I think it’s good when that happens. Corrections make things correct. They get you back to normal prices, what prices should be, what the market can actually bear, and most of the time these things are relatively mild, particularly in the housing market. They’re pretty mild. In 2018, actually prices went flat and they actually dipped a little bit. Do you remember anyone talking about a crash? I don’t. It wasn’t happening. People weren’t talking about it. It’s just that people have a lot of economic fear right now, and by saying the word crash, it gets people riled up. It gets ’em to click on their YouTube, watch, their social media, whatever, but please remember, a massive crash is not the normal conclusion of an economics or housing cycle.
Those are the facts. Now, I’ve talked about this a lot on this show. Is this cycle going to end in a crash? It’s an important question. It’s a legitimate question, and we talk about it all lot on the show, but I will go into a little bit just to make sure we are all on the same page. A full crash happens when there is more supply and demand. That is basically how prices decline. There’s more things to sell. Not a lot of people want to buy them, and so the people with stuff to sell keep lowering and lowering and lowering and lowering their prices until they can entice people to actually buy it. That’s how a crash actually happens, whether it’s in the housing market, stock market, whatever. That can happen in the housing market in two ways, right? People no longer want to buy housing or people are forced to sell raising inventory, and right now, neither of those things are happening.
Yes, demand is down from where it was during the pandemic. That is absolutely true, but it is relatively balanced with supply. That is why we are not seeing runaway inventory. It is also why we haven’t seen prices decline because demand and supply are relative, and when demand dropped after the pandemic, so did supply, and that has kept them in balance. The other thing I should mention is that demand is actually up year over year from where it was in 2025 to where we sit here in 2026. It’s actually up as measured by the Mortgage Bankers Association measurement of mortgage purchase applications. That is actually up, so the idea that demand is fleeing the market is not true. The other part that can happen is that there’s a flood of inventory. This is what a lot of doomers YouTube crash bros are saying is that there is going to be a flood of inventory.
Now, inventory is up from the pandemic, but remember, the pandemic had artificially low levels of inventory, so seeing it come back to normal levels is what we would expect, and actually we’re seeing growth in inventory start to moderate the year over year growth rates for inventory. New listings are starting to come down, which again are signs of a correction and not a crash. If there was going to be forced selling, if people were going to be forced to sell, we would know. We would see it in delinquencies, we would see it in foreclosures. Right? Now, I reported on it the other day, they’re actually lower month over month. They’re up from the pandemic absolutely when they’re artificially low, but they were still below pre pandemic levels where they were in 2019 and no one was talking about a crisis in 2019 with foreclosures or inventory, right, and we’re below that level.
Secondly, credit quality is excellent. Right now, if you look at the average borrower profile, who owns a mortgage in the United States, pretty darn qualified for the mortgage that they have. Another thing is that there’s very few adjustable rate mortgages. They’re very unpopular these days, and so the people who are paying their mortgages are likely to keep paying their mortgages. Now, if unemployment goes to 10%, that might change, but right now it’s at 4%, so I think we’re kind of a long way away from that happening. So I just want to reiterate, if you see news about this, people saying this about the 18 year cycle, yeah, they might be, I think coincidentally, right, that the year that nominal home prices pick is 18 years after 2008, the market can correct. It’s what I expect that will happen, but will it be worse than 2008? No.
I think that is highly, highly unlikely, and if something changes where that becomes more likely, I promise, I will tell you. So takeaways from this. Number one, housing, a hundred percent works in cycles. You should pay attention for them. Again, kind of the whole idea behind the show, you need to know how to handle different parts of the cycle. Also, check out Jay Scott’s book. Really good reading on that if you’re interested, but that’s where the lessons of the 18 year cycle I think end the idea that something as complex as the US housing market can be predicted on some precise timeline using data from our agrarian society of the 18 hundreds. I just don’t buy it. The evidence doesn’t back it up. In fact, anytime someone says anything economic or business related can work on some fixed precise timeline, don’t believe it. When knows anything in your life, economic or not worked out in that sort of clockwork fashion, I’m sorry, but the world is just more complicated than that. The only way to know what’s going on is to stay informed and continuously update your understanding of the markets. That’s what we do on the show. We don’t rely on data from the 18 hundreds. We stay up to date and keep ourselves as informed as possible. Thank you so much for watching this episode of On the Market. If you like this episode, give us a share, a like, or even better, leave us a review on Apple or Spotify. Thanks so much for listening. We’ll see you next time.