The Housing Market – Why it Won’t Tank

Recession, recession, recession. There’s a lot of talk about recession lately and absolutely no one likes that conversation. With the fear of what can happen, as it did in 2008, we’re here to bring you some comfort and explain why we are not looking at a repeat of the 2008 recession and housing market crash.

According to Jacob Channel, Senior Economist at LendingTree, the economy’s pretty strong:

“At least right now, the fundamentals of the economy, despite some hiccups, are doing pretty good. While things are far from perfect, the economy is probably doing better than people want to give it credit for.”

In fact, compared to last year, with 61% of economists projecting a recession, this year that number has decreased to 39% of economists. But why take their word for it, where is the proof? It is unlikely due to the current unemployment rate, which is still very low today. 

The average unemployment rate since 1948 stands around 5.7%, and we stand at 3.7% in January of this year. In 2008, unemployment rate was at 8.3%, well above both the average and our rate today. But what’s to say that our current number won’t increase?

According to data from the Wall Street Journal survey where experts projected unemployment over the next three years compared to the long-term average,  projections do increase, however they don’t even come close to the long-term average, and are much less than the 8.3% crash time. If projections are correct, we can expect for some to lose their jobs in the meantime, which is a tough situation and hardship for anyone to experience. 

Bottom line is that we are not expecting to see a recession in the next year, nor do we expect to see a drastic jump in the unemployment rate. So what does this mean for the housing market? We do not need to fear large amounts of foreclosures that would ultimately lead to another housing crash.

Source

Coldwell Banker Realty