Economic Predictions: Recessions Lead to Declining Home Prices
The Federal Reserve’s efforts to reduce inflation have not yet stabilized the economy. Within the next 12 months, experts think a recession might strike the United States. Historically, recessions have caused reductions in housing prices in the real estate market. But even if a recession occurs, the housing market is durable, according to one analyst. Inflation has caused gas prices to approach all-time highs and food prices to exceed prohibitive.
It has boosted mortgage rates and exacerbated a supply and demand mismatch in the US housing market. Even when buyer demand declines, a shortage of supply keeps prices high. Even if the United States enters a recession, it will take some time for property prices to drop significantly.