The word recession might scare some people but this is definitely not the 2008 housing market. Still, anyone looking to buy a house may want to do so before the recession, of course. The last thing you want is for the tides to turn the minute you buy only to now owe more than your home is worth. And since nobody knows for sure and we can only go on economic predictions, conventional indicators such as unemployment rates, mortgage rates, and construction levels are currently very healthy.
With record-low mortgage rates, the real estate industry is on a steady course, which is quite a contrast from the home buying frenzy over a decade ago. Today, our real estate market is keeping the economy from dipping into another recession because of the tight availability of homes. We are seeing a little bit of housing shortage in some markets across the country and not enough properties for the population growth. However, even economists predict that if there is a downturn, it will be swift and short. Home prices fell in only two of the five recessionary. Since the 1980s. [Source]
Chief economist Frank not theft with CoreLogic says “it’s a very good housing market right now. And I’ll tell you one of the reasons for it. This is the first time in the post-World War II period that we have had an unemployment rate below 4% and at the same time we have mortgage rates below 4%.”
There are three major factors to take into account when a home purchase coincides with national economic anxiety.
Buying a home is a major financial decision and economic slowdowns can trigger layoffs, which will definitely affect someone’s ability to make their mortgage payment. Families want to fill financially secure and if they’re worried about losing their jobs, that can coincide with the recession making people apprehensive to buy.
home values across the nation are projected to maintain an upward trajectory but some local or smaller markets might experience price steps. The neighborhood in which you buy could be a positive or negative move depending on the current housing micro-market.
The size and shape of the house can also reflect market conditions. Buyers know that there’s value in the home they’re trying to purchase and don’t want to overpay. As a result, homes with aspirational prices linger and the real estate sector turned into a buyers market. This is why homebuyers need to evaluate their housing needs and get a long-term budget in place to avoid becoming another motivated seller when economic uncertainty is on the horizon.
As long as homeowners do their homework they should be able to weather even difficult periods where they’re under financial distress. The current national real estate Outlook appears favorable and given the low-interest-rate environment today and the fact that home prices will be rising, if a person is financially ready and prepared to buy a house they should take advantage of the situation.