The Real Impact Of A Housing Market Recession

Key Takeaways

• A housing market recession occurs when home sales decline for six months straight, which officially happened in July 2022.
• Two main forces are driving the housing market recession: increasing interest rates and increasing construction costs.
• When the housing recession is done, we will enter a housing recovery cycle. This is the best time to buy below-market value properties.

Across the United States, we have seen prospective buyers struggle to find an affordable home and get an offer accepted in the last couple of years. Now we’re seeing those same prospective buyers turn up skittish as home prices fall. Many experts are debating whether this is a housing recession or simply a correction of the meteoric climb of home prices during and after the pandemic. The recent data officially points to a housing market recession, but some believe it’s a housing recession simply because builders aren’t building.

How much are housing prices dropping?

We’re finally witnessing a pullback from the quick jump in real estate prices, but the real question is how far will home prices drop? As interest rates climb higher and home sales decrease, the prices of real estate have come down. Gone are the days of the COVID-19 housing boom that led to bidding wars, all cash offers and increased home prices across the country.

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