Tami Savage, Realtor

Your Key to a New Lifestyle

  • Search for Homes
  • Blog
  • About
  • Contact
  • Facebook
  • Instagram
  • LinkedIn
  • YouTube

What Does an Economic Slowdown Mean for the Housing Market?

July 7, 2022 By Tami Savage

What Does an Economic Slowdown Mean for the Housing Market?

According to a recent survey, more and more Americans are concerned about a possible recession. Those concerns were validated when the Federal Reserve met and confirmed they were strongly committed to bringing down inflation. And, in order to do so, they’d use their tools and influence to slow down the economy.

All of this brings up many fears and questions around how it might affect our lives, our jobs, and business overall. And one concern many Americans have is: how will this affect the housing market? We know how economic slowdowns have impacted home prices in the past, but how could this next slowdown affect real estate and the cost of financing a home?

According to Mortgage Specialists: 

“Throughout history, during a recessionary period, interest rates go up at the beginning of the recession. But in order to come out of a recession, interest rates are lowered to stimulate the economy moving forward.”

Here’s the data to back that up. If you look back at each recession going all the way to the early 1980s, here’s what happened to mortgage rates during those times (see chart below):

Mortgage Rates & Recessions

As the chart shows, historically, each time the economy slowed down, mortgage rates decreased. Fortune.com helps explain the trend like this:

“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 it. While an economic slowdown needs to happen to help taper inflation, it hasn’t always been a bad thing for the housing market. Typically, it has meant that the cost to finance a home has gone down, and that’s a good thing. 

Bottom Line

Concerns of a recession are rising. As the economy slows down, history tells us this would likely mean lower mortgage rates for those looking to refinance or buy a home. While no one knows exactly what the future holds, you can make the right decision for you by working with a trusted real estate professional to get expert advice on what’s happening in the housing market and what that means for your homeownership goals.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Free eGuide. Things to Consider When Buying a Home. Send me this eGuide.

Free eGuide. Things to Consider When Selling Your House. Send me this eGuide.

A Guide to Buying Your First Home. Send me this eGuide.

Tags

Baby Boomers Buying Myths Community Demographics Distressed Properties Down Payments First Time Home Buyers Forbearances For Buyers Foreclosures For Sale By Owners For Sellers FSBOs Garden Generation X Generation Z Gen X Gen Z Holidays Home Home Trends Housing Market Updates Infographics Interest Rates Interview Investors Lifestyle Luxury Market Millennials Move-Up Buyers moving New Construction Pricing relocation Remodel Rent vs Buy Report Reviews Selling Myths Senior Market Short Sales SOLD Tax Refund Veterans Video

About Me

I help homeowners sell their existing home and shift into a home more suitable to their needs in the North Metro Atlanta area (specifically around Cumming, Canton, & Milton). Read More…

Let’s Connect

770-744-2524‬ or
(888) 959-9461 x2543

Digitial Business Card

 

  • Email
  • Facebook
  • Instagram
  • LinkedIn
  • YouTube

Calculate Mortgage Payments

Below is a mortgage calculator you may use to help give you an estimate on your monthly payment and other details.

Once calculated, next to the monthly payment on the far right is a small graphic you can click on to see the payment schedule.

Calculate Mortgage Payments

www.mlcalc.com
Copyright © 2019+ Tami Savage LLC. All Rights Reserved. Privacy Policy

DISCLAIMER: The information contained, and the opinions expressed, on this site are NOT intended to be construed as legal or financial advice. Tami Savage does NOT guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as legal or financial advice. You should ALWAYS conduct your own research and due diligence and obtain professional advice before making any legal or financial decisions. Tami Savage will NOT be liable for any loss or damage caused by your reliance on the information or opinions contained herein.