09/06/2022
Does an Impending Recession Hurt the Housing Market?
The word recession is enough to send chills down anyone’s spine, especially homeowners and homebuyers.
What will happen to the housing market? Will we see another housing crisis like 2007?
Fortunately, the answer is ‘no, we will not see another housing crisis.’ Here’s why.
Home Prices are Elevated
If you’ve monitored the housing industry over the last couple of years, you know home prices are wildly inflated. That was due to the crazy high demand and much lower supply. It was a natural turn of events.
Buyers were desperate to buy homes and willing to pay more. Some even spent more than a home’s value, which drove up the market prices.
If the recession happens and home prices fall, they won’t fall to levels as we saw during the housing crisis, causing homeowners to be upside down on their loans. Instead, the values may fall back to where they ‘should’ be, which doesn’t leave most people owing more than their home’s value.
Supply is Still Low
A recession may cause lower demand for housing, which isn’t bad. Right now, demand still exceeds supply, keeping prices elevated. If demand falls, it will equal the supply or close to it, evening out the playing field.
When supply is much lower than demand, it causes problems. In this case, the recession could help the housing inventory, giving the market a larger supply and equalizing the market.
It Would Still be a Good Market for Buyers
You might wonder, should you hold off on buying a home if a recession hits?
Should buyers buy a house in a recession?
Here’s what to consider:
Do you have the money to put down?
Do you plan to stay in the home for at least a few years?
-Is your employment steady?
-Do you qualify for an affordable interest rate?
Final Thoughts
A recession isn’t necessarily a bad thing for the real estate market. On the contrary, it might make housing prices more affordable for more buyers and keep the bidding wars to a minimum.
If you’re ready to explore your options for buying a home, contact me today. Together let’s create a plan to help you achieve your dreams of owning a home.
Annisa Gonzalez,®️
https://annisafindsurhome.com/
