Understanding Real Estate Cycles

Real estate moves in cycles: expansion, slowdown, correction, and recovery.

These cycles are driven by interest rates, employment, population growth, and housing supply.

In 2026, the market is in a rebalancing phase following rapid appreciation earlier in the decade.

Fannie Mae forecasts show steady but slower growth in both home sales and prices over the next few years.

Unlike other asset classes, housing rarely experiences sudden crashes unless driven by credit collapse, as seen in 2008.

Most cycles are gradual and driven by affordability shifts rather than panic.

Understanding this helps buyers and sellers make decisions based on fundamentals instead of headlines.

Every market eventually shifts — the key is recognizing where we are in the cycle.