The one thing you need to know as you watch the news and read the headlines today is that a recession does not mean falling prices.
Most people remember the housing crisis in 2008 and some worry a recession now would lead to a similar situation. But this housing market isn’t a bubble that’s about to burst. Today, conditions in the housing market are very different. One big difference is there’s far less available inventory this time. In 2008, we had a surplus of inventory and that’s why prices fell.
To help show that home prices don’t fall every time there’s a recession, take a look at the historical data (see graph below):
There have been six recessions
in this country over the past
four decades.
As the graph on the previous page shows,
looking at the recessions going all the way
back to the 1980s, home prices appreciated
four times and depreciated only two times.
So, historically, there’s proof that when
there’s a recession, it doesn’t mean home
values will fall or depreciate.
Bottom Line If you're wondering what a
recession would mean for the
housing market, you should
knowhistory can help give us
important context for what
could happen next.
Looking back at the past six
recessions, the data proves a
recession doesn’t mean home
prices will fall.