Since the 2008 housing bubble burst, the word recession
strikes a stronger emotional chord than it ever did before. And while there’s
some debate around whether we’re officially in a recession right now, the good
news is experts say a recession today would likely be mild and the economy
would rebound quickly. As the 2022 CEO Outlook from KPMG says:
“Global CEOs see a ‘mild and short’ recession, yet
optimistic about global economy over 3-year horizon . . .
More than 8 out of 10
anticipate a recession over the next 12 months, with more than half expecting
it to be mild and short.”
To add to that sentiment, housing is typically one of the
first sectors to rebound during a slowdown. As Ali Wolf, Chief Economist at
“Housing is traditionally one of the first sectors to
slow as the economy shifts but is also one of the first to rebound.”
Part of that rebound is tied to what has historically
happened to mortgage rates during recessions. Here’s a look back at rates
during previous economic slowdowns to help put your mind at ease.
Mortgage Rates Typically Fall During Recessions
Historical data helps paint the picture of how a recession
could impact the cost of financing a home. Looking at recessions in this
country going all the way back to 1980, the graph below shows each time the
economy slowed down mortgage rates decreased.
Fortune explains mortgage rates typically fall during an
“Over the past five recessions, mortgage rates have
fallen an average of 1.8 percentage points from the peak seen during the
recession to the trough. And in many cases, they continued to fall after the
fact as it takes some time to turn things around even when the recession is technically
While history doesn’t always repeat itself, we can learn
from and find comfort in the trends of what’s happened in the past. If you’re
thinking about buying or selling a home, you can make the best decision by
working with a trusted real estate professional. That way you have expert
advice on what a recession could mean for the housing market.
History shows you don’t need to fear the word recession when
it comes to the housing market. If you have questions about what’s happening
today, let’s connect so you have expert advice and insights you can trust.
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