Understandably, the word “recession” strikes a very strong emotional chord right now. The good news is that although there is some debate as to whether we are officially in a recession at the moment, experts say that a recession today would likely be mild and that the economy would rebound quickly.
Chief Economists are concurring that housing is typically one of the first sectors to slow as the economy shifts and, also one of the first to rebound.
Part of that rebound is tied to what has historically happened to mortgage rates during recessions. Per Freddie Mac, historically, mortgage rates typically fall during recessions, which has been the case during the last 6 recessions of which 2020 is included:
1980: -4.25
1981: -5.0
1991: -2.25
2001: -.63
2008: -1.13
2020: -1.0
In many cases, rates continued to fall after the fact, as it takes some time to turn things around even when the recession is technically over.
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, let's connect now so that I may guide you through expert advice and insights on what a recession could mean for the housing market.
Photo by Steven Wei on Unsplash
