Here’s what history shows us about recessions, housing prices, and mortgage rates.

If you’ve been reading the news lately, there’s a good chance you’ve come across the word “recession.” For many homeowners and buyers, that sparks a familiar fear: Will my home lose value?

Today, I’ll talk about what a recession means for the housing market and why the outlook may not be as bad as it sounds.

1. Home prices usually don’t fall during recessions. It’s easy to assume a recession equals a housing crash. But history shows a different pattern. In four of the last six U.S. recessions, home prices actually increased. Here’s what the numbers show:

What does this mean? In most recessions, home values held steady or even climbed. That's because real estate is a basic need. People always need a place to live, and homes remain one of the most stable assets in uncertain times.

“Homes are real assets, and people still need a place to live, regardless of the recession.”

2. Mortgage rates often go down during recessions. To keep the economy moving, the Federal Reserve usually lowers interest rates. When that happens, mortgage rates tend to follow suit, sometimes by several percentage points.

In every recession since 1980, mortgage rates dropped, sometimes by 4% or more. Even if we don't see the ultra-low numbers of 2020 again, a dip in rates can mean real savings for buyers or those refinancing.

If a recession hits, don't panic. History shows that home values tend to hold strong, and lower mortgage rates could work in your favor.

Are you thinking of buying, selling, or refinancing and unsure how the current market climate might affect you? Let’s talk. You can reach me at tim@thepeircegroup.com or (843) 960-0223. Let’s make a smart move together.