Should You Buy a House During a RECESSION? Pros & Cons of Buying a Home
There is speculation that a recession will happen in 2023 and this will affect the housing market. While there was a mild recession in 2022, it didn’t affect the housing market and home prices rose in 2022 during the period of negative growth.
Pros of buying a house in a recession:
Lower home prices: During a recession, property values often decline, giving buyers the opportunity to purchase homes at a lower cost.
Interest rates: Recessions usually result in lower interest rates, making it more affordable for buyers to take out a mortgage.
Negotiating power: With fewer buyers in the market during a recession, those who are in a position to buy may have more negotiating power with sellers, such as getting a better price or better terms.
Cons of buying a house in a recession:
Unemployment: High levels of unemployment during a recession can make it difficult for buyers to secure financing, especially if they have lost their job or have seen their income reduced.
Uncertainty: The economy and real estate market are uncertain during a recession, making it difficult for buyers to know if they are making a wise investment.
Difficulty obtaining financing: Banks and other lenders may be more cautious during a recession, making it harder for buyers to obtain financing.
Home values may not recover: The value of a home purchased during a recession may not recover as quickly as expected, especially if the recession continues for an extended period.