Fear of a recession has returned to the news. And if you’re thinking about buying or selling sometime soon, that may leave you wondering if you should reconsider the timing of your move.
According to a recent survey conducted by Keeping Current Matters (KCM) and John Burns Research and Consulting (JBREC), 68% of respondents are postponing plans to buy or sell because of economic uncertainty.
It might not be for the reason you believe, though. Not all people are waiting out of concern. Because they have hope, some buyers are waiting. In line with Realtor.com:
“In 2025Q1, 3 in 10 (29.8% of) surveyed homebuyers said a recession would make them at least somewhat more likely to purchase a home . . . This reflects a common dynamic where some buyers see a downturn as an opportunity. If the economy enters a recession, the Federal Reserve may respond by lowering interest rates to stimulate activity, potentially putting downward pressure on mortgage rates and easing affordability concerns. As a result, buyers—especially those with limited down payments—might view a recession as a more favorable time to enter the market.”
Additionally, there is some validity to the notion that lower mortgage rates could result from a recession. Mortgage rates typically decline during economic downturns, according to history. Although it is a typical pattern, it is not a guarantee. Mortgage rates have decreased during each of the last six recessions, according to data (see graph below):
Here’s what those buyers might not be thinking about, though. A large number of those optimistic purchasers are also expecting a decline in home values. And history presents a different picture at that point.
In four of the previous six recessions, home prices increased, per data from Cotality (formerly CoreLogic) (see graph below).
Therefore, despite the widespread belief that home prices will drop as they did in 2008 in the event of a recession, this was the exception rather than the rule. The market had never experienced such a sharp decline in prices. And even though the number of homes on the market is increasing, it hasn’t happened since, primarily because there is still a chronic inventory shortage.
Know this: prices are still rising or staying the same in most metro areas, albeit at a much slower rate, as prices tend to stay on whatever trajectory they are already on. A large drop is therefore unlikely. As Navy Federal Credit Union Corporate Economist Robert Frick explains:
“Hopes that an economic slowdown will depress housing prices are wishful thinking at this point . . .”
Bottom Line
It’s crucial to know what actually occurs during a recession and what probably won’t if you’ve been waiting for one to strike. There may be a chance for lower mortgage rates. However, cheaper housing costs? It is much less likely.