Since the collapse of the housing bubble in 2008, the phrase "recession" has greater emotional resonance than ever. And while there’s some discussion over whether we’re formally in a recession right now, the good news is analysts think a recession today would likely be short and the economy would rebound fast. 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.”

Housing is often one of the first industries to recover during a slowdown, which only strengthens that opinion. As Ali Wolf, Chief Economist at Zonda, explains:

“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 the bounce is connected to what has historically occurred to mortgage rates during recessions. Here’s a look back at rates during earlier economic slowdowns to help put your mind at ease.

Mortgage Rates Typically Fall During Recessions

Historical information provides a clearer picture of how a recession can affect the cost of mortgage lending. The graph below illustrates how mortgage rates reduced each time the economy contracted in this country starting in 1980.

According to Fortune, mortgage rates often decrease when the economy is sluggish:

“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.”

Even while history doesn't always repeat itself, we may still learn from and take solace in the patterns of what has already transpired. Working with a reputable real estate agent will help you make the best choice if you're considering buying or selling a house. You will then receive professional guidance on what a recession would entail for the home market.

To sum up

History demonstrates that when it comes to the housing market, you shouldn't be afraid of the phrase recession. Let's contact if you have any inquiries regarding the current situation so that you can receive professional guidance and reliable insights.