18-Year Housing Cycle Points to Imminent Crash, Analyst Warns

Stock and Bitcoin investors are looking for the next major top, but macro analyst Jason Pizzino believes the initial red flag came from US housing.

Pizzino's thesis is based on an 18-year property cycle that comes from roughly 220 years of US home-sales data. The present cycle started around 2011–2012 and puts the housing peak in 2025–26, and a trough could come around 2029–30.

“Once everyone’s in, you’re at the peak,” Pizzino said.

Although the most recent figures don't confirm the cycle, they make the prediction more credible. US home prices increased 1.5% year over year in June, but in real terms they have dropped for 13 months in a row.

Sales of new homes declined 10.5% in July. The median price slipped to $393,800, the lowest in five years. Builder confidence stands at 35, well below the neutral 50 mark.

Housing Leads, Stocks Could Follow

D.R. Horton is Pizzino's critical indicator. During the previous housing cycle, the homebuilder reached its peak ahead of the broader market. Applying the same pattern, D.R. Horton's late-2024 high suggests a potential stock-market top near late 2026 or early 2027.

The stock closed Friday at $142.75. According to Pizzino, a drop below approximately $130 would reinforce his argument.

Equities are still close to all-time highs. The S&P 500 ended Friday at 7,718.60, roughly 1% off its August 13 record. Meanwhile, robust August employment figures increased the probability of a September Federal Reserve rate hike to around 60%.

Bitcoin Stays the Wild Card

Bitcoin is currently near $79,700, a sharp rise from its July bottom of about $57,700. The cryptocurrency has also regained its 200-day moving average.

Pizzino expects Bitcoin could continue to climb, albeit with lower gains. His approximate forecast from the July low is around $120,000. He views $180,000 as far more challenging if credit conditions continue to tighten.

Analyst Benjamin Cowen is more cautious about using the cycle as a trade signal.

“I buy index funds every single month… even if I think we’re going to have a correction,” said Cowen.

That might be the most valuable insight. The cycle provides a warning area, not a deadline. Pizzino's own recommendation is straightforward: make a plan before credit dries up.

“Trade the market you have,” Cowen said, “not the market you want.”