The number of economists who predict a recession within the next 12 months is rising, according to a new Wall Street Journal study. Only 12% of the analysts polled in July 2021 predicted a recession by this point. However, 49% of those surveyed in July think a recession will occur in the next 12 months.
As the possibility of a recession becomes more prevalent, many people are concerned that they should postpone their plans to become homeowners.
In order to demonstrate why you shouldn't be concerned about what a recession might mean for the housing market today, let's take a look at historical data that illustrates what happened in real estate during previous recessions.
It helps to look at historical data to demonstrate that home prices don't always decrease during recessions. Home prices increased in four of the most recent six recessions, as shown in the graph below, which shows the recessions going all the way back to 1980. Therefore, historically, a slowing economy has not resulted in a decline in property values.
The majority of individuals believe that another recession will mirror what occurred during the housing crisis of 2008 (the greater of the two red bands in the graph above). However, a crash in the property market is not imminent. Today's principles are considerably different from those of 2008. So don't assume that we are going in the same direction.
Research also contributes to the understanding of how a recession might affect the cost of mortgage finance. According to the data below, historically, mortgage rates fell whenever the economy slowed down.
According to Fortune, mortgage rates often decrease when the economy is slowing down:
Even while history doesn't always repeat itself, we can nevertheless draw comfort and lessons from it.
Everyone is aware of what transpired in the property market in 2008. If you're intending to buy or sell a home, though, you don't need to be concerned about the word recession. Historical data shows that during most recessions, home price increases have remained steady and mortgage rates have decreased.
Let's connect if you're considering buying or selling a house so you can get professional guidance on what's going on in the housing market and what that implies for your homeownership aspirations.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice.
EXIT Realty Landmark, LLC. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein.
Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional
advice before making any investment decision. EXIT Realty Landmark, LLC. will not be liable for any loss or damage caused by your reliance on
the information or opinions contained herein
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