How a recession could impact the housing market
The fundamentals of the housing market are strong. But is it recession-proof" The United States has enjoyed one of the largest economic expansions in its history since the 2008 housing bust brought the global economy to its knees. But with each passing year, the recovery gets a little longer in the tooth, prompting questions about if or when a cyclical recession might take place.
These questions have gotten louder in recent months as rising interest rates and tariffs have wreaked havoc on the stock market, which had been hitting new all-time highs on a regular basis. One of the most reliable tells of an impending recession?the dreaded Treasury bond yield curve inversion?occurred earlier this month between 2-year and 5-year Treasury bonds, leading some economists to sound their alarms. If a recession does hit, how would it affect a housing market that?s already starting to cool" With the scars of 2008 still fresh, it?s understandable that some would worry about another housing implosion. But most real estate professionals don?t expect a possible recession to spell doom for the housing market. Some even think it would hardly affect housing at all.
?People?s incomes get squeezed [in a downturn], but they still need a place to live,? said Aaron Terrazas, Zillow?s director of economic research. ?Usually what that means is they?re still in the market if they need one, but their price-point is lower.?
Housing in previous recessions
It?s somewhat counter-intuitive, ...
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