Why there won’t be a recession that tanks the housing market

As a professional Realtor in our local market, it is my duty to provide you with the most accurate and up-to-date information regarding the possibility of a recession and its potential impact on the housing market. While concerns about a recession have been prevalent, I am here to assure you that the current economic outlook is positive and signals a low risk of a housing market crash.

Let's begin by examining the analysis of renowned economist Jacob Channel, a Senior Economist at LendingTree. According to his expert opinion, despite some minor setbacks, the fundamentals of our economy remain strong. Although we acknowledge that the economy is not in perfect shape, it is important to note that its performance is actually better than many perceive.

Backing this sentiment, a recent survey conducted by the reputable Wall Street Journal reveals that only 39% of economists anticipate a recession within the next year. This figure shows a significant decline from the 61% of economists who predicted a recession just a year ago. This positive trend is reflected graphically, indicating an optimistic outlook for our economy.

Furthermore, the current unemployment rate serves as a key indicator of the economy's health. In comparison to historical records from Macrotrends, the Bureau of Labor Statistics (BLS), and Trading Economics, our unemployment rate remains impressively low.

The depicted graph highlights the discrepancy between today's figures, indicated in blue, and the average unemployment rate since 1948, represented by the orange bar. Notably, during the 2008 financial crisis, symbolized by the red bar, the unemployment rate peaked at 8.3%. Both the red and orange bars signify significantly higher levels than the current unemployment rate.

Looking forward, it is crucial to consider the projections provided by leading economists in the same Wall Steet Journal survey. These projections concerning unemployment rates over the next three years are notably lower than the long-term average, translating to a highly favorable outlook. The graph below visually presents this data along with the experts' predictions compared to historical records.

 

While some job loss may occur in the coming year, it is important to remember that even during challenging times, the impact on individuals and families can be mitigated. It's imperative to ask the pertinent question: will the potential job losses be substantial enough to trigger a wave of foreclosures, thereby endangering the housing market?

Fortunately, the projections indicate that the unemployment rate is highly unlikely to surpass the 75-year average. Therefore, there is no need to anticipate a significant surge in foreclosures that could heavily impact our local housing market.

To summarize, as a dedicated Realtor with an extensive understanding of our local market, I want to assure you that the risk of a recession and subsequent housing market crash is low. The analysis from esteemed economists, the gradual decline in projected recession rates, and the favorable unemployment rate projections all contribute to this positive outlook. You can trust that my expertise and commitment to providing you with accurate information will guide you confidently through any real estate decisions you make.

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