Recession talk has been blowing up the headlines lately, leaving many home buyers and sellers feeling on edge. Is another 2008 housing market crash lurking around the corner?
Before you hit the panic button, let’s take a deep breath and see what the experts have to say about the current market’s health.
Strong Economic Fundamentals
According to Jacob Channel, a senior economist at LendingTree, the economy is actually doing pretty well. His opinion is that the fundamentals are good, even if things aren’t perfect. This optimism might explain why a recent Wall Street Journal survey shows only 39% of economists predict a recession in the next year. That’s a big drop from the 61% who predicted one just a year ago.
Low Unemployment: A Good Sign
Many experts point to the current low unemployment rate as a reason for optimism. Let’s compare it to historical data. When we look at numbers from Macrotrends, the Bureau of Labor Statistics, and Trading Economics, it’s clear the unemployment rate is currently very low. The average unemployment rate since 1948 sits around 5.7%. Right after the 2008 financial crisis and housing market crash, the rate skyrocketed to 8.3%. Thankfully, January’s unemployment rate is much lower than both those numbers (3.7%).
Will Unemployment Rise?
That Wall Street Journal survey also asked about future unemployment projections. The good news? Economists don’t expect the unemployment rate to even approach the long-term average, let alone the devastating 8.3% we saw during the last crash.
Job Losses Happen, But Won’t Crash Housing
Even with low projections, some job losses are inevitable. Job insecurity can be stressful, but the key question is: will there be enough job losses to cause a wave of foreclosures and crash the housing market? Looking ahead, projections suggest the unemployment rate will likely stay below the historical average. This means we shouldn’t expect a surge in foreclosures that would significantly impact the housing market.
The Bottom Line
Most experts believe we’ll avoid a recession in the next year. Additionally, they don’t predict a significant rise in unemployment. This means you can ditch the fear of a foreclosure wave crashing the housing market!
In conclusion, whether you’re buying, selling, or just curious about the market, our Surterre real estate specialists are here to help you navigate the exciting world of real estate. Contact us today at SurterreProperties.com and let’s chat about your goals!
