Login | Sign Up |
MENU
  • Home Page
  • About
  • Contact
    • Seller Resources
    • Get Prequalified
  • Meet Our San Diego Team
    • Property Search
    • Featured Homes
    • New on The Market
  • Buyers
    • Property Search
    • Dream Home Concierge
    • Mortgage Rates
    • Mortgage Calculator
    • Get Prequalified
  • Sellers
    • Home Values
    • How We Market Your San Diego Property
  • Neighborhoods
    • Testimonials
  • Our Blog
  • Home Page
  • About
  • Contact
    • Seller Resources
    • Get Prequalified
  • Meet Our San Diego Team
    • Property Search
    • Featured Homes
    • New on The Market
  • Buyers
    • Property Search
    • Dream Home Concierge
    • Mortgage Rates
    • Mortgage Calculator
    • Get Prequalified
  • Sellers
    • Home Values
    • How We Market Your San Diego Property
  • Neighborhoods
    • Testimonials
  • Our Blog

What Does a Recession Mean for the Housing Market?

July 10th, 2022

According to a recent survey, more and more Americans are concerned about a possible recession. Those concerns were validated when the Federal Reserve met and confirmed they were strongly committed to bringing down inflation. And, in order to do so, they’d use their tools and influence to slow down the economy.

All of this brings up many fears and questions around how it might affect our lives, our jobs, and business overall. And one concern many Americans have is: how will this affect the housing market? We know how economic slowdowns have impacted home prices in the past, but how could this next slowdown affect real estate and the cost of financing a home?

“Throughout history, during a recessionary period, interest rates go up at the beginning of the recession. But in order to come out of a recession, interest rates are lowered to stimulate the economy moving forward.”

Here’s the data to back that up. If you look back at each recession going all the way to the early 1980s, here’s what happened to mortgage rates during those times (see chart below):

What Does an Economic Slowdown Mean for the Housing Market? | MyKCM

As the chart shows, historically, each time the economy slowed down, mortgage rates decreased. Fortune.com helps explain the trend like this:

“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. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”


What Does an Economic Slowdown Mean for the Housing Market? | MyKCM

And while history doesn’t always repeat itself, we can learn from it. While an economic slowdown needs to happen to help taper inflation, it hasn’t always been a bad thing for the housing market. Typically, it has meant that the cost to finance a home has gone down, and that’s a good thing. 

Bottom Line

Concerns of a recession are rising. As the economy slows down, history tells us this would likely mean lower mortgage rates for those looking to refinance or buy a home. While no one knows exactly what the future holds, you can make the right decision for you by working with a trusted real estate professional to get expert advice on what’s happening in the housing market and what that means for your homeownership goals.

Share on:

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Previous Post:
California Housing Market Update
Next Post:
Time to Reconsider Buying: The Market is Shifting
Recent Posts
  • San Diego Home Prices Predicted to Drop
  • Do These 7 Things Before Putting Your San Diego Home on the Market
  • Relief for Homebuyers in 2023?
  • San Diego Housing Market Update
  • Why Today is Nothing Like the 2008 Housing Crash
Categories
  • Real Estate News
  • Social Media Posts
  • Uncategorized
Archives
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • August 2022
  • July 2022
  • June 2022
  • July 2020
Recent Comments

    Featured Listings

    Questions? Ask Here!

    © 2023 Rebecca Pollack-Rude, (619) 846-3040, CA DRE Lic. #01817034, San Diego Realty Gals, 15714 Circo Diegueno Rancho Santa Fe, CA 92091, CA DRE Lic. #01813572
    Websites for REALTORS