6 things you need to know about mortgage fees and home prices during a recession

The economy is everywhere. Inflation may be cooled Rising tariffs, Stock market dip And so is the global uncertainty I’ll keep everyone. When mortgage fees fly around, home buyers ask me: Will homes become more affordable in the recession?

After that 20 years in real estatelike 2008, I’ve seen my share of ups and downs, from boom times to full-scale crashes. The truth is there Always an opportunity Even in a recession for certain home buyers. The market never stops during a recession. It just shifts. And if you’re financially ready, that shift is actually possible Work in your favor.

Let’s find out what the recession really means Mortgage feeswhether and when housing prices will fall Buy a house.

The risk of a recession is real

There are a lot of recessions Warning Sign Right now. Layoffs were picked up, GDP slowed down and consumer trust fell into the market. Salaries are not far away, and retirement accounts are hit.

The tight disposable income and budgets indicate a general slowdown in the economy, but technically, we are not in a recession yet. To hit that definition, it will require negative GDP growth for the second consecutive quarter. But for many people, it It already feels like one.

Even if inflation is not rising, daily goods and services are still high; The budget is hammered. Whenever you swipe a card at a grocery store, people feel the squeeze, shapes their way of thinking about making bulk purchases like home.

Interest rate reductions are not imminent

Over the past few years, borrowing costs have been expensive and I have paid tribute to the loss of loans by families and businesses. The Federal Reserve is likely to do that Reduce interest rates again Later this year, we finally made funding cheaper.

However, these cuts won’t come until summer. The Fed is a bit stuck now. The lost steam and inflation in the economy are cooled, but not fast enough. Central banks are paying attention to policy changes, particularly with tariffs that promote prices.

Low interest rates ultimately affect the housing market, but the Fed does not directly control mortgage rates. Mortgage fees It moves based on many factors, including bond markets and investor expectations. Don’t expect mortgage fees even if the Fed begins cutting again Drop it like crazy. Many of these expected cuts have already been priced in the market.

Mortgage fees don’t drop significantly

As we saw in 2020 and early 2008, mortgage rates often drop during economic recessions.

But things are troubling this time. There is volatility everywhere. The fees could drop, but they might also shoot back with good financial news. Like many professionals in the real estate industry, I think I’m average. 30-year fixed mortgage fees Hover between 6.5% and 7.25% Most of the time in 2025there are weekly jumps and dips in that range.

If you have 4% or 5% mortgage rateyou may be waiting longer than you wish. To see the rates drop significantly, there needs to be far more negative economic news.

It’s also worth pointing out that Your personal financial situation is more important More than your interest rate. If you have a solid income stream and a long-term plan to pay off your mortgage, waiting for the full fee may not be worth it.

Home prices are unlikely to bottom out

After years of steady growth, if the bubble bursts, home prices could hypothetically crash. However, in today’s housing market, real estate prices will not fall in a major way.

Historically, housing prices Don’t actually fall too much during a recession. The 2008 housing accident was an exception and not a rule. Perhaps what we see is that gratitude and small dips are slow in certain markets, especially in hit regions Higher insurance coststaxes or natural disasters (Florida, Texas, Louisiana comes to mind). As supply rose, housing prices were able to fall in some parts of the country.

But nationwide, we are still Handling low inventory. Until that changes, it’s hard to see prices drop dramatically. Furthermore, given the high construction costs and labor costs, it is clear that home prices will not bottom out anytime soon.

Waiting isn’t necessarily cheaper

If you’re financially stable, it might be cheaper to buy a house in a recession. You may find better trading, reduced competition More negotiation skills. However, once the loan is closed, getting a loan can be even more difficult. That’s what we’re already starting to see in condos Specific types of properties.

There is also a “wealth effect.” When people feel wealthy, like when the stock portfolio or home value is rising, they are confident they will make big purchases. But when those numbers start to slide or even threaten with work anxiety, people are drawn back even if nothing changes every day. Economic turbulence has a major impact on the activity of buyers. If someone just lost $20,000 in 401(k), they’re not in a hurry Get a new mortgage.

There’s no best time to buy

The best time to buy a home That’s when it makes sense to you. If you have a stable income Strong trustand you are ready to settle, so a recession in the housing market can actually work in your favor.

Don’t wait for the magical “perfect time” to retrieve your mortgage. The green light that most people await does not exist. If you prepare, provide information and work with the right team, you can move wisely no matter what the economy does.