Buyers Say They’re Skittish About Recession Possibility
August 29, 2019
More than half of potential home shoppers say they’ll put their home search on hold if another economic downturn strikes, according to a newly released survey from realtor.com®. Although buyers are optimistic that it will be more mild than the Great Recession in 2008, they still say it would make them more hesitant in the housing market.
More than 36% of the 755 active buyers surveyed this month by Toluna Research, on behalf of realtor.com®, said they expect the next recession to occur sometime in 2020. Seventeen percent expect a recession to still occur this year, 14% expect one in 2021, and 7% by 2022.
When a recession does occur, nearly 56% of survey respondents said they would delay their home search until the economy improved.
“Economic activity is cyclical, so yes, undoubtedly we will face another recession at some point in the future, but we do not expect it to be anything like 2008,” says George Ratiu, senior economist at realtor.com®. “The next recession will likely be driven by factors outside of housing, such as a prolonged trade war, cutbacks in corporate spending or contagion from a European recession. Unlike 2008, mortgage underwriting has been more disciplined and regulated, which should provide a more secure foundation for housing during the economic ups and downs.”
Indeed, home buyers do believe any future economic downturn this time around will be less severe than the last. About one-third of buyers (35%) said they would be concerned that a future recession would be worse than 2008.
“When warned about an incoming storm, Americans know to prepare by stocking up on necessities and reinforcing their shelter,” Ratiu says. “Similarly, given the cyclical nature of economic activity, consumers can and should prepare for the next downturn now. Taking steps to shore up their financial well-being, strengthening their professional networks, and having adequate savings would provide cushioning during the slowdown.”
Updated: January 26, 2022