A new survey by Realtor.com shows that the threat of an impending recession has done little to deter home buyers.
While 70 percent of Americans expect the U.S. to enter another recession in the next three years, most remain optimistic that housing will still perform far better than it did in the 2008 recession.
In a survey of 1,000 consumers, almost 30 percent said they expect the U.S. to enter recession by 2020.
“The U.S. economy has been on a hot streak for the last seven years, producing steady economic growth and low unemployment rates,” said realtor.com Chief Economist Danielle Hale. “Historically, this type of growth hasn’t continued indefinitely, and U.S. home shoppers think it will come to an end sooner rather than later.”
Still, some 56% of home shoppers believe real estate prices have reached their peak. Consumers who expect a recession to come sooner rather than later were the most likely to have this view, Hale said.
“When the U.S. enters its next recession, it is unlikely that the housing market will see a sharp nationwide downturn,” Hale said. “The same record low inventory levels that have made buying a home so difficult recently will likely protect home prices in the next recession.”
But some buyers who fear another recession may enter the spring market with “eyes wide open” and “slightly pessimistic,” the survey noted. “This is a stark contrast to the years leading up to the last recession, when ‘irrational exuberance’ was more common and yet another reason to expect that the next downturn will be very different for the housing market than the last,” the report notes.
Since the recovery from the Great Recession started in 2010, home prices have increased by 49 percent. The U.S. economy has grown by $3 trillion, and 18.7 million more jobs have been created.
“This persistent optimism toward homeownership is likely a key reason that home shoppers are confident and looking to buy, even as they expect a recession is approaching,” the report notes.