What Happens to Home Prices During a Recession?

A recession can be both good and bad for the housing market. In 4 of the last 6 recessions home prices actually went up. In all 6 of the last housing markets, mortgage interest rates dropped, making homes even more affordable.

Most people believe that during a recession, home prices typically decrease due to a decrease in demand for housing and an increase in housing inventory. Economic factors such as unemployment and decreased consumer spending can also contribute to the decrease in home prices. Additionally, if there is a decrease in access to credit, it can make it harder for people to purchase homes, further decreasing demand and causing prices to drop. However, it is important to note that the effect of a recession on home prices can vary depending on the severity of the recession and the specific housing market.

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