Market volatility this week has led many to believe that a recession is on the horizon, Curbed reports. But how would it affect the housing market?
There’s been a widespread feeling that the decade-long economic expansion has been due for a correction, and homebuyers have felt nervous about the future. A Realtor.com survey released last month found consumer confidence fell 4.4 percent over the past year, which the author felt could reflect consumer concerns over a potential recession or future economic growth.
But, as Curbed’s Jeff Andrews found earlier this year, recessions don’t always impact housing with the same force as the job market or other sectors of the economy. According to ATTOM Data Solutions, a leading real estate data provider, only twice in the last five recessions—in 1990 and 2008—did home prices come down. In 1990, prices decreased by less than a percent. During the other three, prices actually went up.
Javier Vivas, director of economic research at Realtor.com, says that the inverted yield curve is often a red flag for economic trouble, and that right now, it definitely signals a loss of economic momentum. But he doesn’t believe the housing market is in nearly as much trouble as it was during the last recession.