With nearly constant media coverage and talk of the inverted US Treasury yield curve, Trump’s tariffs on foreign goods and trade war with China, and Wall Street volatility exploding this month to its highest levels during 2019, it’s not surprising that homebuyers are anticipating a recession within the near future.
A just released study by realtor.com confirms that 36% of potential homebuyers, compared with 30% when asked earlier this spring, are thinking recession in 2020. On either end of 2020, realtor.com found that 17% of respondents to its latest survey anticipate a recession this year while 14% anticipate a recession in 2021.
Even more respondents, nearly 56% of potential homebuyers, said they would put a hold on their home buying plans and simply stop looking for any home during a recession.
George Ratiu, a senior economist with realtor.com, offered his views about any pending economic downturn to InmanNews’ Jim Dalrymple II. “Undoubtedly, we will face another recession at some point in the future.”
Ratiu’s good news is that any pending recession would not be as severe as the 2008 recession due to more disciplined and regulated mortgage underwriting. His other good news is that the housing industry, unlike in 2008, will not be the impetus for any coming recession. “…likely (the next recession) will be driven by factors outside of housing, such as a prolonged trade war, cutbacks in corporate spending or contagion from a European recession.”
Because economic activity is always cyclical, Ratiu advises consumers to prepare now for a downturn just as one would prepare for a pending storm. “Take steps to shore up (your) financial well-being, strengthen (your) professional networks and have adequate savings to provide cushioning during a slowdown.”