If you’ve been thinking about selling, you’ve probably seen plenty of headlines suggesting buyers have just about disappeared. But there’s a big difference between a slow market
What an Economic Slowdown Could Mean for the Housing Market
Dated: May 1 2025
Views: 61
What an Economic Slowdown Could Mean for the Housing Market
Talk about the economy is all over the news, and the odds of a recession are rising this year. That’s leaving a lot of people wondering what it means for the value of their home – and their buying power.
Let’s take a look at some historical data to show what’s happened in the housing market during each recession, going all the way back to the 1980s. The facts may surprise you.
A Recession Doesn’t Mean Home Prices Will Fall
Many people think that if a recession hits, home prices will fall like they did in 2008. But that was an exception, not the rule. It was the only time the market saw such a steep drop in prices. And it hasn’t happened since, mainly because inventory is still so low overall. Even in markets where the number of homes for sale has started to rise this year, inventory is still far below the oversupply of homes that led up to the housing crash.
In fact, according to data from Cotality (formerly CoreLogic), in four of the last six recessions, home prices actually went up (see graph below)
So, don’t assume a recession will lead to a significant drop in home values. The data simply doesn’t support that idea. Instead, home prices usually follow whatever trajectory they’re already on. And right now, nationally, home prices are still rising, just at a more normal pace.
Mortgage Rates Typically Decline During Recessions
While home prices tend to stay on their current path, mortgage rates usually drop during economic slowdowns. Again, looking at data from the last six recessions, mortgage rates fell each time (see graph below):
So, a recession means rates could decline. And while that would help with your buying power, don’t expect the return of a 3% rate.
Bottom Line
The answer to the recession question is still unknown, but the odds have gone up. However, that doesn’t mean you have to worry about what it means for the housing market – or the value of your home. Historical data tells us what usually happens.
If you’re wondering how the current economy is impacting our local market, let’s connect.
Christopher Bravata
I've dedicated my real estate career with connections to our "Heroes". Who are our Heroes? Those in the professions of the US Military, Police, Fire, Education, Medical, and Social Services, who self....
Latest Blog Posts
If the first half of this year has left you feeling stuck, you’re not the only one. Mortgage rates stayed higher than people wanted. Affordability remained tight. And uncertainty overseas
Buying or selling a home is a big financial decision. And right now, it feels even bigger. Inflation is high, costs are high, and you want to be sure the timing is right before you make your move.
Saving for a down payment can feel like the hardest part of buying a home. And with affordability as tight as it’s been lately, it’s fair to wonder how anyone manages it right now. Here
Based on information from California Regional Multiple Listing Service, Inc. as of September 27, 2026 5:06 AM UTC This information is for your personal, non-commercial use and may not be used for any purpose other than to identify prospective properties you may be interested in purchasing. Display of MLS data is usually deemed reliable but is NOT guaranteed accurate by the MLS. Buyers are responsible for verifying the accuracy of all information and should investigate the data themselves or retain appropriate professionals. Information from sources other than the Listing Agent may have been included in the MLS data. Unless otherwise specified in writing, Broker/Agent has not and will not verify any information obtained from other sources. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
