Why Waiting for a Recession To Move May Cost You

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Is a Recession on the Horizon?

Fear of a recession is back in the headlines. And if you’re thinking about buying or selling sometime soon, that may leave you wondering if you should reconsider the timing of your move.

A recent survey by John Burns Research and Consulting (JBREC) and Keeping Current Matters (KCM) found that 68% of people are delaying plans to buy or sell due to economic uncertainty. But it may not be for the reason you think.

Why Some Buyers Are Hopeful, Not Hesitant

Not everyone is holding off because they’re worried. Some buyers are actually waiting because they’re hopeful.

According to Realtor.com, nearly 3 in 10 homebuyers said a recession would actually make them more likely to purchase a home. That might sound surprising at first, but it reflects a common dynamic: some buyers see a downturn as an opportunity.

If the economy enters a recession, the Federal Reserve may respond by lowering interest rates to stimulate activity. That could lead to lower mortgage rates and ease some affordability concerns. For many buyers—especially those with limited down payments—that could make it feel like the right time to jump into the market.

Will Mortgage Rates Really Fall?

And there’s some truth to that line of thinking. History shows that mortgage rates tend to drop during economic slowdowns. It’s not guaranteed, of course, but looking at data from the last six recessions, rates fell every single time.

Lower mortgage rates can make monthly payments more affordable and boost buyer confidence. But lower rates aren’t the whole story.

What About Home Prices?

Here’s what some hopeful buyers may not be considering. Many assume that along with lower rates, home prices will fall too. And that’s where history tells a different story.

According to data from Cotality (formerly CoreLogic), home prices actually increased in four of the last six recessions. The steep price drop during the 2008 housing crash was the exception, not the rule.

That dramatic decline in 2008 was caused by a unique combination of factors, including risky lending practices and an oversupply of homes. Today’s market is very different.

The Market Today: What to Expect

Even with the number of homes on the market rising, there’s still a long-standing shortage of inventory. That continues to keep prices steady or rising in most metro areas, although at a much slower pace than we saw a few years ago.

In short, a big price drop isn’t likely. As Robert Frick, Corporate Economist with Navy Federal Credit Union, puts it:
“Hopes that an economic slowdown will depress housing prices are wishful thinking at this point.”

Bottom Line: Don’t Wait for a Market That May Never Come

If you’ve been waiting on the sidelines for a recession to make your move, it’s important to understand what really happens during one—and what likely won’t.

Yes, lower mortgage rates could be on the table. But a major drop in home prices? That’s far less likely.

Don’t wait for a market that may never come. If you’re thinking about buying or selling, connect with me at 917-254-2103. Let’s talk through what today’s economy really means for you and create a smart plan that works in your favor—no matter what the headlines say. My goal is to help you accomplish yours!