Friday, October 28, 2022 / by Laura Larson
Since the housing bubble of 2008, the word "recession" has had greater emotional connotations than ever. While there is some disagreement over whether we are currently experiencing a recession, there is solace in that economists predict that any downturn of the economy will be short-lived and that the economy will recover swiftly. According to KPMG's CEO Outlook for 2022: “Global CEOs see a ‘mild and short’ recession, yet optimistic about the global economy over a 3-year horizon..." and "More than 8 out of 10 anticipate a recession over the next 12 months, with more than half expecting it to be mild and short.”
In addition, housing is often one of the first industries to recover during a slowdown. According to Ali Wolf, Chief Economist at Zonda: “Housing is traditionally one of the first sectors to slow as the economy shifts but is also one of the first to rebound.” This recovery is related in part to past trends in mortgage rates during downturns.
During recessions, mortgage rates typically decrease.
Mortgage rates reductions during the last 6 recessions
Fortune explains mortgage rates typically fall during an economic slowdown: “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.”
Even while history doesn't always repeat itself, we may still learn from and recognize the patterns of what has already transpired. Working with a reputable real estate agent will help you make the best choice if you're considering buying or selling a house. You will then receive professional guidance on what a recession would entail for your real estate goals.