As talk about a potential recession grows, you may be wondering what a recession could mean for the housing market. Here’s a look at the historical data to show what happened in real estate during previous recessions to help prove why you shouldn’t be afraid of what a recession could mean for the housing market today.
>>A Recession Doesn’t Mean Falling Home Prices
Historically, when the economy slows down, it doesn’t mean home values will always fall.
Most people remember the housing crisis in 2008 and think another recession would be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. According to experts, home prices will vary by market and may go up or down depending on the local area. But the average of their 2023 forecasts shows prices will net neutral nationwide, not fall drastically like they did in 2008.
>>A Recession Means Falling Mortgage Rates
Research also helps paint the picture of how a recession could impact the cost of financing a home.
Fortune explains mortgage rates typically fall during an economic slowdown:
“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough.”
In 2023, market experts say mortgage rates will likely stabilize below the peak we saw last year.
The big takeaway is you don’t need to fear the word recession when it comes to housing. In fact, experts say a recession would be mild and housing would play a key role in a quick economic rebound.
If you’re thinking about buying or selling a home this year, DM me.
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