A growing threat of recession isn’t deterring buyers from jumping into the spring market. Nearly 70 percent believe the U.S. will enter a recession within the next three years, but overall, buyers remain optimistic that the housing market will fare better than it did in 2008, according to a new realtor.com® survey.
Nearly 30 percent of more than 1,000 consumers surveyed say they expect a recession to begin sometime in 2020. “The U.S. economy has been on a hot streak for the last seven years, producing steady economic growth and low unemployment rates,” says realtor.com® Chief Economist Danielle Hale. “Historically, this type of growth hasn’t continued indefinitely, and U.S. home shoppers think it will come to an end sooner rather than later.”
Fifty-six percent of home shoppers believe real estate prices have reached their peak. Consumers who expect a recession to come sooner rather than later were the most likely to have this view, Hale says. “When the U.S. enters its next recession, it is unlikely that the housing market will see a sharp nationwide downturn,” Hale says. “The same record low inventory levels that have made buying a home so difficult recently will likely protect home prices in the next recession.”
But some buyers who fear another recession may enter the spring market with “eyes wide open” and “slightly pessimistic,” the realtor.com® survey reports. “This is a stark contrast to the years leading up to the last recession, when ‘irrational exuberance’ was more common and yet another reason to expect that the next downturn will be very different for the housing market than the last,” the report notes.
Since the recovery from the Great Recession started in 2010, home prices have increased by 49 percent. The U.S. economy has grown by $3 trillion, and 18.7 million more jobs have been created. “This persistent optimism toward homeownership is likely a key reason that home shoppers are confident and looking to buy, even as they expect a recession is approaching,” the report notes.
