Would a Recession Mean Disaster for the Tyler Housing Market?
According to a recent survey from the Wall Street Journal, the percentage of economists who believe we’ll see a recession in the next 12 months is growing. When polled this July, 49% believe we will see a recession in the coming 12 months.
Many of our Tyler area friends may be wondering: what will a recession do to home prices in our area?
Historical data show what happened during previous recessions and why you shouldn’t be afraid of what a recession would mean for the Tyler area housing market today.
A Recession Doesn’t Mean Falling Home Prices
Looking at each recession that happened in the past forty years, home prices increased in four of the last six recessions. When the economy slows down, it doesn’t automatically mean home values will fall.
It’s understandable to be concerned that the next recession would repeat what happened in the housing crisis of 2008. Today’s housing market isn’t about to crash. The fundamentals are very different today than they were in 2008.
A Recession Means Falling Mortgage Rates
Research also helps paint the picture of how a recession could lower the cost of financing a home. Historically, each time the economy slowed down, mortgage rates decreased, which is great for home affordability.
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.
Here’s the Deal
Everyone remembers what happened in the housing market in 2008. But you don’t need to be too concerned about a recession reducing the market value of Tyler area homes. According to historical data, in most recessions, home price gains have stayed strong, and mortgage rates have declined.
If you’re thinking about buying or selling a home, let’s connect so you have expert advice on what’s happening in the housing market and what that means for your homeownership goals.