Recession fears are making headlines, and many people are wondering: What happens to the housing market if the economy takes a hit? Will home prices plummet? Will mortgage rates skyrocket? Let’s break it down and see what history tells us.
Do Home Prices Drop During a Recession?
When people hear the word “recession,” they often think back to 2008 when home prices took a massive dive. But here’s the reality—that was an exception, not the norm. In four of the last six recessions, home prices actually went up.
Historically, home prices tend to follow the momentum they already have rather than collapse due to economic downturns. And right now? Prices are still climbing at a steady pace in many markets. So, if you’re thinking of buying or selling, don’t assume a recession means you’ll see a housing crash—the data just doesn’t support that idea.
Will Mortgage Rates Fall During a Recession?
If there’s one thing that history does show, it’s that mortgage rates usually decline during recessions. Looking at data from the last six recessions, interest rates fell each time.
What does that mean for you? Lower rates could make homeownership more affordable, but don’t expect to see those ultra-low 3% rates from a few years ago. However, any drop in rates could help offset rising home prices and improve affordability for buyers.
What Buyers and Sellers Should Know
🏡 Thinking About Buying? If mortgage rates dip, you could lock in a better deal on a home. But don’t wait around hoping for the perfect moment—home prices are still moving up, and competition is still strong in many areas.
📈 Planning to Sell? A recession doesn’t mean you’ll have to slash your asking price. If history is any indicator, home values tend to hold steady or even increase. Plus, with demand for housing still high, it’s still a great time to sell.
Final Thoughts
While no one can predict the future with absolute certainty, history gives us a strong clue: a recession doesn’t equal a housing market collapse. If you’re thinking about buying or selling, the best move is to stay informed and work with an expert who understands the market.
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