Better Homes and Gardens Real Estate The Milestone Team

A Recession Doesn’t Equal a Housing Crisis

Are you wondering how a recession affects the US housing market? Here are a few key points to help put some perspective on its impact.

Interest rates go up at the beginning of a recession but are then lowered to stimulate the economy to move forward. Over the past 5 recessions, rates have fallen an avg. of 1.8% from the peak to the trough. Bear in mind interest rates will most likely rise until inflation peaks.

Four out of the six times we were in a recession, home prices appreciated. They fell only twice – once marginally in the early 90’s and in 2008.
The number of offers received on a home has dropped from an avg. of 5.5 offers in April to 4.2 in June. Still well above the pre-pandemic norm but this shows a moderating of the market.
A month ago, 61% of offers were over asking and this has now softened to 55% over asking price on the avg. home sold. Not a huge decline but still a sign of the times.
There is a slowdown in the pace of sales. It is looking more like it did in 2018 and 2019, which by the way, were great years for real estate.
Active inventory is growing but there are still way more buyers than we have sellers. This will continue to put upward pressure on prices.

Whether buying or selling, contact me to make an informed decision on planning your next move.

A Recession Doesn’t Equal a Housing Crisis