What Can Past Recessions Tell Us About the Housing Market?
No matter if you’re an economics aficionado or not, you’ve likely heard murmurs of an impending recession. Economic conditions are determined by a variety of factors, so instead of delving into each one in detail, let’s take a look at what the experts and history have to say about what the future may hold.
As discussion about a potential recession intensifies, you may be wondering what impact it could have on the housing market. To provide some perspective, let’s take a look at the historical data to see what happened to real estate during previous recessions. This will help to allay any fears you may have about what a recession could mean for the housing market today.
Most people recall the housing crisis of 2008 (the larger of the two red bars in the graph above) and assume that another recession would be a repeat of what happened to housing then. However, the current housing market is unlikely to crash due to the fact that the fundamentals of the market have changed since 2008. Experts suggest that home prices will fluctuate depending on the local area, with some areas experiencing an increase and others a decrease. Nevertheless, the average of their 2023 forecasts indicates that prices will remain relatively stable nationwide, unlike the drastic decline seen in 2008.
In 2023, market experts predict that mortgage rates will likely remain below the peak we saw last year. This is because mortgage rates tend to be influenced by inflation, and early indications suggest that inflation is beginning to slow. If inflation continues to decrease, rates may even drop further, though the days of 3% are likely in the past.
The main takeaway is that there is no need to be concerned about a recession in relation to housing. In fact, experts believe that any recession would be mild and that housing would play a major role in a speedy economic recovery.
While history may not always repeat itself, we can certainly learn from it. Historical data suggests that, in most recessions, home values have appreciated and mortgage rates have decreased.
If you’re considering buying or selling a home this year, let’s connect so you can benefit from my expertise on the current housing market and how it may affect your homeownership goals.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Diane Casey Luong Realtor 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. Diane Casey Luong will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
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About Diane Casey Luong
As an award-winning, full-time Realtor®, Diane is a proven leader among Worcester MA real estate agents, fully committed to you and your property goals.
As a requested speaker, Diane educates audiences on topics such as the purchasing foreclosure properties, nuances of the real estate market from neighborhood to neighborhood, and understanding the ever-changing trends in the real estate industry.
A graduate of the Massachusetts Academy of Real Estate, Diane has brought her expertise in real estate to Worcester, MA, and its surrounding towns.
Diane Casey Luong
REMAX Advantage 1
25 Union Street
Worcester, MA 01608