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Some homebuyers see a recession as a good possibility, as it would likely lower mortgage rates and tamp down competition.
More than half of those looking to purchase a home are concerned about a potential recession, but some believe an economic downturn could present an ideal opportunity to buy.
According to a survey, over 60% of potential homebuyers anticipate a recession within the next year.However, nearly 30% feel that such a downturn could make it easier to buy a home.
“While concerns are definitely present, some buyers anticipate that a downturn can bring opportunity,” said Danielle Hale, chief economist at Realtor.com.
these prospective buyers see potential advantages in a recession, including the likelihood of lower mortgage rates and reduced competition.
The survey indicated that homebuyers are frequently enough more focused on their personal financial situations than on broader economic conditions.Over 54% stated that a recession would not affect their decision to buy a home, while only 15% said it would deter them.
“Well-prepared buyers who have been waiting on the sidelines are likely motivated by personal and lifestyle needs like growing families, new jobs, or retirements,” hale said. “And these considerations can outweigh short-term economic uncertainties.”
Current Obstacles for Homebuyers
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Even without a worsening economy, the survey reveals that potential buyers are already facing challenges under the current economic conditions.
The primary obstacle cited by 44% of respondents was the limited number of available properties. While available home listings have recently improved, they remain more than 16% below the ancient average. Budgetary constraints were a major concern for 36% of buyers, while others pointed to challenges related to credit availability and mortgage qualifications.
“Well-prepared buyers who have been waiting on the sidelines are likely motivated by personal and lifestyle needs.”
Interestingly, only about 8% of homebuyers mentioned competition from other buyers as a significant obstacle.
“this trend aligns with increased time on market, a moderate rise in listings, and more stable pricing; all of which point to a slower, less stressful home search experience,” the report said.
Frequently Asked Questions
- How does a recession affect mortgage rates?
- During a recession, central banks frequently enough lower interest rates to stimulate economic activity, which can lead to lower mortgage rates.
- Is it a good time to buy a home during a recession?
- It can be a good time for those with stable finances, as there might potentially be less competition and potentially lower prices and interest rates.
- What are the risks of buying a home during a recession?
- The risks include potential job loss and further declines in home values, which could lead to financial strain.
By Arlo Hemphill | WASHINGTON – 2025/05/25 07:53:52
Arlo Hemphill is a financial journalist covering real estate trends and economic impacts on the housing market.
