How likely is a recession in 2020? This is the question of the hour. It’s on everyone’s mind. Fed chairman Jerome Powell recently stated he does not expect a recession in the near future. (https://www.usnews.com/news/business/articles/2019-09-06/fed-chairman-powell-says-he-doesnt-expect-recessionhttps://www.usnews.com/news/business/articles/2019-09-06/fed-chairman-powell-says-he-doesnt-expect-recession) But even if we do experience a recession in the future, we need to remember that recession does NOT mean housing crisis. In three of the last five recessions, housing prices actually INCREASED during the recession. Obviously, 2008 was the most drastic recession recently. In recent survey, Pulsenomics asked leading experts about the median appreciation of housing. All the analysts said that the housing price sare going to go up, not down. Appreciation is going to slow down, but home prices are expected to go up from about 2.5% to 4.1% through 2023. Why is this important to know? We don’t want to get in a panic about buying and selling and become afraid that it will be like 2008. In fact, Morgan Housel, a well-renowned financial analyst said it’s statistically, highly unlikely that the next recession will be like the one we experienced last decade. He tweeted that “It could be over before you even realize it began”. Prices and appreciation are expected to just be more normalized. Don’t let hype prevent you from the participating in the dream and benefits of home ownership. According to Mark Fleming, First American’s Chief Economist, he says, “If the 30-year, fixed-rate mortgage “declines just a fraction more,”consumer house-buying power would reach “its highest level in almost 20 years.” So what does this tell us? Buyers will be able to afford more home for the money! As always, if you have any questions at all, please feel free to reach out to us. This is Michele Shinedling with Heritage Real Estate and as always, make it a great home selling and buying day and remember, when you do what you love, people love what you do.
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