History Proves Recession Doesn’t Equal a Housing Crisis Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
History Proves Recession Doesn't Equal a Housing Crisis Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
- Home prices have appreciated in 4 of the last 6 recessions
- Home prices fell only twice - minimally in the early 90s, and then by nearly 20% in the housing crash of 2008.
Today's housing market is nothing like it was in 2008
Home Prices vs. Unemployment Rate
Unemployment generally has a bigger impact on sales volume than prices
As you can see in the chart above, home prices and the unemployment rate have an inverse relationship - when unemployment goes up, home prices tend to go down. However, the correlation is far from perfect, and home prices have actually appreciated during periods of high unemployment in the past. This is likely due to the fact that interest rates are also low during these periods, making homes more affordable for buyers.
What This Means for Home Buyers
If you're thinking of buying a home, don't let the fear of a recession dissuade you
While a recession can certainly have an impact on the housing market, it's important to remember that recessions don't always equal a housing crisis. Home prices have actually appreciated in 4 of the last 6 recessions, and even during periods of high unemployment, there have been periods when prices have gone up. So if you're thinking of buying a home, don't let the fear of a recession dissuade you - instead, focus on finding a property that meets your needs and is within your budget.
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