What an Economic Slowdown Could Mean for the Housing Market

Lately, the word "recession" has been making regular appearances in the news—and naturally, that has many homeowners and potential buyers wondering what it might mean for their finances, especially when it comes to real estate. The good news? History shows us that a slowing economy doesn’t always spell trouble for the housing market. In fact, the facts may surprise you.

A Recession Doesn’t Mean Home Prices Will Fall

When people hear the word “recession,” many immediately think back to 2008. But that housing crash was the exception, not the norm. It was driven by a unique set of circumstances, including an oversupply of homes and risky lending practices. In contrast, during four of the last six recessions, home prices actually increased. What’s different today is our low inventory—there simply aren’t enough homes on the market to create the kind of oversupply that causes prices to fall dramatically. In most cases, home prices tend to stay on the path they’re already on. And today, while prices are not soaring like they were a couple of years ago, they’re still trending upward at a more sustainable pace.

Mortgage Rates Typically Decline During Recessions

Another key trend to know: Mortgage rates typically decline during recessions. History shows that in every one of the last six recessions, mortgage rates went down. That’s important for buyers. Lower rates mean more affordable monthly payments and increased buying power. While we’re unlikely to see a return to the record-low 3% rates of the past, any rate relief can make a real difference.

What This Means For You

So what should you take away from all this?

• A recession does not guarantee falling home prices.

• Mortgage rates could soften, potentially improving affordability.

• Real estate tends to be more resilient than many people think.

If you’re considering buying or selling, don’t let headlines hold you back. Every market is local—and I’m here to help you understand what’s happening in our area. 

Have questions about how today’s economy might impact your real estate goals? Let’s talk. I’d love to help you make informed decisions with confidence.