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What a Recession Could Mean for the Housing Market in Long Beach

Recession talk is all over the news, and the odds of a recession are rising this year. That leaves people wondering what would happen to the housing market if we do go into a recession.

Let’s take a look at some historical data to show what’s happened in housing for each recession going all the way back to the 1980s.

It Doesn’t Mean Home Prices Will Fall

Many people think that if a recession hits, home prices will fall like they did in 2008. But that was an exception, not the rule. It was the only time we saw such a steep drop in prices. It hasn’t happened since.

According to data from CoreLogic, in four of the last six recessions, home prices actually went up (see below):

Mortgage Rates Typically Decline During Recessions

While home prices tend to stay on their current path, mortgage rates usually drop during economic slowdowns. Again, looking at data from the last six recessions, mortgage rates fell each time (see graph above).

A recession means mortgage rates could decline based on the data. While that would help with affordability, don’t expect the return of a 3% interest rate.

Given current events, the odds of a recession have gone up. That doesn’t mean you have to wonder about the impact on the housing market – historical data tells us what usually happens.

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