Does it make sense to buy a home, during a recession?
Is housing recession proof?
Happy May! Can You Believe the First Four Months of 2025 Are Already Behind Us?
What happens to housing with the potential for a U.S. recession looming—and what that might mean for real estate and mortgage rates.
📉 First, What Is a Recession?
A recession is generally defined as two consecutive quarters of a declining economy. In other words, it's a “look-back” event—we can only confirm it’s happening once the data comes in.
So far, reports show the U.S. economy shrunk in the first quarter of 2025, the first contraction in several years. Whether we’re in a recession right now won’t be clear until the second-quarter data is released in July.
🏡 So, What Happens to Real Estate During a Recession?
Here’s the good news: History is on our side.
Over the past 75 years, the U.S. has gone through eight recessions, and through nearly all of them, real estate has remained a stable, long-term wealth-building tool.
Yes, there have been bumps along the way. The 2008–2009 housing crash during the Great Recession was a major exception. But outside of that, home values have continued to trend upward, even during economic slowdowns.
If you’re looking at the chart on this page, the gray columns show official recession periods. Notice how home prices don’t collapse with each downturn—they often hold steady or even rise. (See Top Chart Below)
📉 What About Mortgage Rates?
Another silver lining: Mortgage rates often decline during recessions.
It doesn’t always happen in a straight line—there’s typically some volatility—but the overall trend during recessionary periods is downward. That means home purchases become more affordable for buyers using financing. (See Bottom Chart Below)
💡 So, Is It Smart to Buy During a Recession?
If you're a qualified buyer, the answer is often yes.
While others sit on the sidelines, waiting for the “perfect moment,” savvy buyers take advantage of less competition, more negotiating power, and lower rates that often come during economic slowdowns.
*** Bottom Line:
Real estate has proven resilient time and again. Recessions come and go, but
homeownership remains one of the most reliable paths to building wealth—especially when approached with a long-term mindset.
To Your Success,
Ken and Your Home Buying Team at FAIRWAY
PS: If you have questions about buying and/or selling a home in today's market, reach out to us.
email: kenp@fairwaymc.com
office: 717-431-9299
text: 717-690-3928
Start Your PreApproved Now: www.GetFairwayNow.com
