The reasons why the Housing Market WILL NOT crash in 2023.
These are the key factors playing into our market right now and the reasons we will not see a housing crash in 2023.
Remember from the last two parts of this series that what’s hurting real estate right now is affordability not demand. Plenty of people want to buy a home right now but they can’t afford it. This demand will recover the Real Estate market in 2023.
What Interest Rates ALWAYS do in Recessions:
Because a Recession by definition is a weak or weakening economy we can predict that policy makers will lower interest rates to spur the economy and bring it out of recession. This assumption has held true during every Recession over the past 50+ years.
Here is a key point to remember, Recessions always bring significantly lower interest rates. Look at this historical chart since 1970.
Eight of the last nine Recessions have done this:
Most people remember intimately the pain of the 2008 Recession and housing Crash. Naturally they see that as a predictable relationship and assume that Recessions always bring housing crashes. In reality this is not true. History tells us that recessions are typically good for home values.
Eight of the last nine recessions have seen home values remain level and even increase. This happens because Recessions ALWAYS bring lower interest rates and lower interest rates ALWAYS bring higher affordability and demand.
The 2008 Market crash was A-typical because of some very specific factors which part 4 of this series will clarify. Don’t rely on what you saw in 2008 to predict what will happen in 2023. The two markets are fundamentally different.
Keep reading for my predictions for the 2023 Real Estate projections.
President – Reverse Mortgage Specialist
Heritage Reverse Mortgage
Heritage NMLS #1497455 Trevor’s NMLS #: 267962
1060 South Main Street Bldg. A Suite 101B
St George Utah 84770