The last recession was due to by the foreclosure crisis and the downturn in the housing market
According to Market Watch
“While the housing crisis is still fresh on the minds of many, and was the catalyst of the Great Recession, the U.S. housing market has weathered all other recessions since 1980,” wrote Odeta Kushi, deputy chief economist at First American and the report’s author. “In fact, the housing market may actually aid the economy in recovering from the next recession — a role it has traditionally played in previous economic recoveries.”
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Home price appreciation continued during previous downturns
Using its own data along with information from Freddie Mac FMCC, 8.511% and the National Association of Realtors, the report maps out how the housing market has traditionally fared in economic downturns. In most other cases, home price appreciation continued at an even pace, and existing-home sales growth only edged downward slightly, Kushi wrote.
On average, U.S. house prices fell approximately 33% during the Great Recession
So what made the Great Recession different? The housing boom that preceded the last recession was largely driven by an explosion in both home-building activity and mortgage credit. Home buyers were able to get mortgages with no documentation of their income and no down payment, and many loans had introductory 0% interest periods that made them cheap to start but more expensive as time wore on.
These homeowners were over-leveraged. “The housing crisis in the Great Recession was fueled heavily by the fact that job loss was paired with a significant share of homeowners who didn’t have much equity in their homes,” Kushi wrote.
And because developers had constructed so many new homes, home values quickly sank when the bubble burst, exacerbating the situation further.
Now is still a good time to buy or sell your home.
Kevin Polite, Solid Source Realty, Inc. 404-299-7100
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