Homebuyers Leery of Recession, but Entering Market With Optimism This Spring
By Suzanne De Vita
Homebuyers are largely optimistic about their prospects this spring, despite the fact that the majority—70 percent—are predicting a recession in the next three years, according to a new realtor.com® survey. Approximately 30 percent are anticipating a downturn will form in 2020, and 16 percent are expecting it to hit in 2021. Twenty-one percent are unsure.
Forty-one percent, however, are not counting on a downturn like the Great Recession, which catapulted the housing market into turmoil. Fifty-six percent believe home prices are topping out—a belief that could be fueling the perception that a recession is in the works. Since 2010, home prices have spiked 49 percent, realtor.com reports, and 45 percent of buyers feel "slightly more optimistic" as a result of that surge.
"The U.S. economy has been on a hot streak for the last seven years, producing steady economic growth and low unemployment rates," says Danielle Hale, chief economist at realtor.com. "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."
Homebuyers' intuition is likely on the mark, she says.
"When the U.S. enters its next recession, it is unlikely that the housing market will see a sharp nationwide downturn. The same record low inventory levels that have made buying a home so difficult recently will likely protect home prices in the next recession."
Realtor.com based its findings on 1,015 homebuyers who indicated they plan to purchase in the next year.
For more information, please visit www.realtor.com.