Tim, HogWash, and What Steve Schappert Think about Recession and Our Housing Market

Philip Roth Home.

A recent survey from the Wall Street Journal, has economists freaking out about some recession they think will “hit” our country in the next 12 months.

Steve Schappert says “HogWash”!

When surveyed in July 2021, 12% of economists consulted thought there’d be a recession by now.

But this July, which you can guess, when polled, 49% believe we will see a recession in the coming 12 months.

So what, half these guys, change their opinion overnight?

Steve Schappert says “HogWash”!

Depression = Ressession.

It is this “speculation” that drives fear into the misinformed public, a tactic used upon our great society since forever.

Speculation is the fear that drives these people, the guys who are paid handsomely to impose upon the Great People of the United States of  America.

And as more recession-mongering-talk fills the air, one concern many people have is: should I delay my homeownership plans if there’s a recession?

You guessed it! Steve Schappert says “HogWash”!

Look! Here’s a look at historical data to show what happened in real estate during previous recessions to help ease your concerns as to why you shouldn’t be afraid of what a recession would mean for the housing market today.

A Recession Doesn’t Mean Falling Home Prices

To show that home prices don’t fall every time there’s a recession, it helps to turn to historical data. As the graph below illustrates, looking at the recessions going all the way back to 1980, home prices appreciated in four of the last six recessions. So, historically, when the economy slows down, it doesn’t mean home values will fall.

What Would a Recession Mean for the Housing Market? | MyKCM

Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession would repeat what happened then. But this housing market isn’t about to crash. The fundamentals are very different today than they were in 2008. So, don’t assume we’re heading down the same path.

A “Recession” is not the End of Your World!

Research also helps paint the picture of how a recession could impact the cost of financing a home. As the chart below shows, historically, each time the economy slowed down, mortgage rates decreased.

What Would a Recession Mean for the Housing Market? | MyKCM

Fortune explains that mortgage rates typically fall during an economic slowdown:

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 over.”

And while history doesn’t always repeat itself, we can learn from and find comfort in the historical data.

There’s no doubt everyone remembers what happened in the housing market in 2008. But you don’t need to fear the word recession if you’re planning to buy or sell a home. According to historical data, in most recessions, home price gains have stayed strong, and mortgage rates have declined.

Let us connect. You receive great advice on what’s happening in the housing market and what that means for your homeownership goals.


 


Steve Schappert Realtor

Call and Text Steve Schappert 203-994-3950

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You are a concerned homebuyer or homeseller and you need to know what is happening in your housing market so you can make the most informed decisions possible.

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