Part I of this two-part series focuses on how a possible recession may impact rising mortgage rates and home prices.

The bottom line for buyers and sellers?  It’s less risky to buy and/or sell now rather than waiting until next year.  Find out why here.

Q – If/when the Federal Reserve raises interest rates again, will mortgage rates also rise?

  • Taylor Marr, Redfin Deputy Chief Economist – “The current 6% mortgage rates already have future interest-rate expectations baked in. I expect interest rates to remain high and the housing market to remain relatively quiet for the next few months.”
  • Chen Zhao – Redfin Economics Research Lead – “The consensus in the economist community is that the Fed will raise interest rates again in July by 50-75 basis points followed by three smaller hikes later this year…But if inflation remains high…the Fed could increase rates more than expected and mortgage rates could rise again.”

Q – Is a recession coming?  If yes, how a recession could impact housing market?

  • Daryl Fairweather – Redfin Chief Economist – “The likelihood of the US entering a recession late this year or in 2023 has increased over the last few months…but…the housing market looks resilient. In the long run, housing is a stable investment and less risky than other assets.”
  • Marr – “Home prices have passed their peak. A lot of homes are less valuable now than they were a few months ago-but they’re still more valuable than they were three years ago, and they’re likely to stay that way…if (a) recession is mild, mortgage rates could fall…”
  • Zhao – “…It does seem like we’re set up for a textbook recession that’s fairly mild…even in a mild recession, the unemployment rate would likely tick up to 5% or 6%, a noticeable increase but not nearly as high as the Great Recession..(therefore) impact on housing depends on employment.”

Q – What’s going to happen to home prices? 

  • Fairweather – Whether or not there’s a recession, home prices will decline from their peak. “But prices aren’t likely to fall below pre-pandemic levels nationwide.”
  • Marr – It depends. “Places that had big demand booms during the pandemic like Boise and Sacramento will likely see prices decline, while places that remain relatively affordable may not…For a lot of homeowners, the decline is only on paper.  If you’re not selling or refinancing your home in the next six months or year, your home being worth a little less now than it was a few months ago won’t impact you.  Home values typically rise over time.”
  • Zhao – “For homeowners, buyers and sellers, all that matters is what happens in your neighborhood. That’s going to vary a lot from place to place.  Buyers and sellers should pay attention to their local area.” 

Thanks to Redfin.

URGENT! Exclusive Invite: Join Premier Coaching for FREE! You read that correctly, Premier Coaching for the first 30 days is 100%, no strings attached FREE. Here is what you get: DISC Personality Test, Seller and Buyer Scripts, Presentations, Lead Generation Systems, Market Shift Plan, Real Estate Treasure Map, Members Only Community Groups (and a ton more). The best part is you will have a DAILY Live Coaching Call with a Harris Certified Coach. Yep, you read that correctly….every weekday you will attend a semi-private coaching session with your coach. All of this is 100% FREE. Of course, you want to join Premier Coaching. There is Zero Risk and joining costs you nothing. This is the Real Estate Success system you need in this quickly changing market. Join Premier Coaching NOW.

Claim Your FREE Real Estate Treasure Map!