The real estate agent says how the recession will affect mortgage rates and home prices.

There are lots of economic headlines Recession indicatorfrom Customs and potential trade wars with the wild Stock market shaking. With mortgage fees throughout the map, some home buyers suspect that there may be a silver lining for the recession. Mortgage fees And the prices of the home.

I I worked in real estate For over 20 years, we have seen the market share of fluctuations, like in 2008, from boom times to full-scale crashes. Buy a housethe economy is just one factor to consider. No matter how troublesome the market is, there is Always an opportunity For specific home buyers. If you are financially prepared, the current economic landscape is actually possible Work in your favor.

Here’s what a recession means to help you make informed decisions Mortgage feeshome prices and your home buying timeline.

Are we in a recession right now?

There are a lot of recessions Warning Sign Right now. Layoffs were picked up, slowing GDP and consumer trust was falling apart. 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.

Will interest rate reductions come soon?

Over the past few years, borrowing costs have been expensive and I am honored to see families and businesses take away their loans. The Federal Reserve is likely to do that Reduce interest rates again Later this year, we finally made funding cheaper.

However, these cuts probably won’t come until early summer. The Fed is a bit stuck now. The economy has lost steam and inflation is 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 are already priced in the market.

read more: Will tariffs destroy the housing market? Links between trade policy and mortgage fees

Will the mortgage fee be lowered?

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.

Are home prices at the bottom?

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 big 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.

read more: Are you waiting for home prices to fall? Don’t hold your breath

Is it cheaper to buy a house now?

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.

https://www.youtube.com/watch?v=3cgc2fue_0u

Do I need to wait to take my mortgage?

The best time to buy a home That’s when it makes sense to you. If you have a stable income Strong trustand you’re ready to settle, so there are several benefits to recession in the housing market. It all depends on your personal situation.

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 is doing.