Here’s What a Recession Could Mean for the Housing Market

by | Mar 31, 2025 | Buyers, Home Prices, Sellers

Housing Market Recession talk is all over the news, and the odds of a recession are rising this year. And that leaves people wondering what would happen to the housing market if we do go into a recession.
Let’s take a look at some historical data to show what’s happened in housing for each recession going all the way back to the 1980s.
A Recession Doesn’t Mean Home Prices Will Fall
Many people think that if a recession hits, home prices will fall like they did in 2008. But that was an exception, not the rule. It was the only time we saw such a steep drop in prices. And it hasn’t happened since.
In fact, according to data from CoreLogic, in four of the last six recessions, home prices actually went up (see graph below):
So, if you’re thinking about buying or selling a home, don’t assume a recession will lead to a crash in home prices. The data simply doesn’t support that idea. Instead, home prices usually follow whatever trajectory they’re already on. And right now, nationally, home prices are still rising at a more normal pace.
Mortgage Rates Typically Decline During Recessions
While home prices tend to stay on their current path, mortgage rates usually drop during economic slowdowns. Again, looking at data from the last six recessions, mortgage rates fell each time (see graph below):
So, a recession means mortgage rates could decline based on the data. While that would help with affordability, don’t expect the return of a 3% rate.
Bottom Line
The answer to the recession question is still unknown, but the odds have gone up. But that doesn’t mean you have to wonder about the impact on the housing market – historical data tells us what usually happens.[/caption]

One Homebuying Step You Don’t Want To Skip: Pre-Approval

by | Feb 15, 2025 | Buyers, Home Prices, Home Search, Popular Articles

There’s one essential step in the homebuying process you may not know a whole lot about and that’s pre-approval. Here’s a rundown of what it is and why it’s so important right now.

What Is Pre-Approval?

Pre-approval is like getting a green light from a lender. It lets you know how much they’re willing to let you borrow for a home. To determine that number, a lender looks at your financial history. According to Realtor.com, these are some of the documents a lender may ask you for during this process:

  • W-2s from the last two years
  • Tax returns from the last two years
  • Pay stubs from the last 30 days
  • Bank statements from the last 60 days
  • Investment account statements (if applicable)
  • Two years of history of where you’ve lived

The result? You’ll get a pre-approval letter showing what you can borrow. Keep in mind, that any changes in your finances can affect your pre-approval status. So, after you receive your letter, avoid switching jobs, applying for new credit cards or other loans, or taking out large sums of money from your savings.

How It Helps You Determine Your Borrowing Power

This year, home prices are expected to rise in most places and mortgage rates are still showing some volatility. So, since affordability is still tight, it’s a good idea to talk to a lender about your home loan options and how today’s changing mortgage rates will impact your future monthly payment.

The pre-approval process is the perfect time for that. Because it determines the maximum amount you can borrow, pre-approval also helps you figure out your budget. You should use this information to tailor your home search to what you’re actually comfortable with as far as a monthly mortgage payment. That way, you don’t fall in love with a house that’s out of your comfort zone.

How It Helps You Stand Out

Once you find a home you want to put an offer on, pre-approval has another big perk. It not only makes your offer stronger, it shows sellers you’ve already undergone a credit and financial check.

When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”

Bottom Line

If you’re planning on buying a home, getting pre-approved for a mortgage should be one of the first things on your to-do list. Not only will it give you a better understanding of your borrowing power, it can put you in the best position possible to make a strong offer when you find a home you love. Connect with a trusted lender to learn more.  If you need some resources, let me know!