From Yahoo Finance: 2025-03-21 12:38:00

As recession fears rise, concerns about the housing market’s reaction grow. However, historical data shows that the housing market can remain strong during economic downturns.

A new analysis from First American indicates that past recessions have not always led to doom for real estate. For example, during the 2020 pandemic, home sales initially dropped but quickly rebounded due to low mortgage rates and high demand.

The housing market’s performance during a recession is influenced by the causes of the downturn and the Federal Reserve’s actions. Typically, the Fed lowers interest rates to boost growth, leading to lower mortgage rates and increased house-buying power.

The Federal Reserve recently kept interest rates stable and hinted at two rate cuts later in the year. Mortgage rates have slightly decreased from their peak of 7% but have plateaued around 6.6%, partly due to uncertainties surrounding President Trump’s tariff policies.

First American economist Odeta Kushi believes that despite recession fears, the housing market has historically shown resilience. Lower mortgage rates could potentially support the market, as seen in previous economic downturns.



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