A Recession Doesn’t Equal a Housing Crisis
Experts are predicting a potential recession on the horizon, which may lead some to worry about buying or selling a house. However, historical data shows that a recession doesn’t always mean falling home prices. In fact, home prices have appreciated in four of the last six recessions dating back to 1980. The 2008 housing crisis was an outlier due to a surplus of homes for sale at the same time as distressed properties flooded the market. In contrast, today’s housing market has a low supply of homes for sale, so while there may be slight price declines in some areas, a crash is unlikely. A recession typically means falling mortgage rates, which creates more opportunity for homebuyers. Overall, experts predict any recession will be mild and short, and there’s no need to fear what it means for the housing market.
Why Today’s Foreclosure Numbers Are Nothing Like 2008
The recent increase in foreclosure filings may have some potential homebuyers worried, but a closer look at the data reveals a different story. Foreclosures have been at record lows in recent years due to relief options for homeowners, such as the forbearance program. While the end of the government’s moratorium on foreclosures has led to an increase, it’s not the sudden flood of foreclosures that some may fear. Rising unemployment rates and other economic challenges are contributing factors, but many homeowners still have significant home equity that can help prevent increased levels of foreclosure activity. Overall, while foreclosures may be climbing, they are nowhere near the levels seen during the housing crisis, and the current market won’t lead to a crash in home prices.