Survey: If a Downturn Hits, Homebuyers Plan to Wait It Out
By Suzanne De Vita
As the conversation on the possibility of a recession swells, homebuyers plan to postpone their search until the storm subsides, according to a new realtor.com® survey.
In the event of a slowdown, 56 percent of buyers could delay their home search, according to findings from the survey. When asked their expectations regarding timing, 36 percent pegged the recession in 2020, 17 percent said in 2019 and 14 percent said in 2021. Notably, 17 percent were uncertain—a feeling likely motivated by unknowns, such as global tensions and the trade war.
Still, there is growing positive sentiment, according to responses to the survey. Approximately 44 percent believe the next recession will not be as damaging as it was in 2008—a boost from 40 percent earlier this year. Twenty-two percent, however, fear a Great Recession repeat.
According to analysts at realtor.com, the cycle is turning—but anticipate a dissimilar outcome.
"Economic activity is cyclical, so yes, undoubtedly we will face another recession at some point in the future, but we do not expect it to be anything like 2008," says George Ratiu, senior economist at realtor.com. "The next recession will likely be driven by factors outside of housing, such as a prolonged trade war, cutbacks in corporate spending or contagion from a European recession. Unlike 2008, mortgage underwriting has been more disciplined and regulated, which should provide a more secure foundation for housing during the economic ups and downs.
"When warned about an incoming storm, Americans know to prepare by stocking up on necessities and reinforcing their shelter," Ratiu says. "Similarly, given the cyclical nature of economic activity, consumers can and should prepare for the next downturn now. Taking steps to shore up their financial well-being, strengthening their professional networks and having adequate savings would provide cushioning during the slowdown."
For more information, please visit www.realtor.com.