According to a recent survey, more Americans are worried about a potential recession. That concern was justified when the Fed met and confirmed they were committed to bringing down inflation.
What Exactly is a RECESSION?
A recession is defined as two consecutive quarters of negative economic growth measured by a country's gross domestic product (GDP). In the U.S., a recession is also typically characterized by high unemployment, falling stock prices, and declining home values.
While the Fed focuses on maintaining stable prices, they also pay close attention to employment levels and credit conditions when setting monetary policy. That's why concerns about a potential recession have been rising recently.
The Fed's recent actions suggest they believe that slowing down the economy is necessary to bring inflation back to its target level of 2%. However, this monetary policy tightening can also lead to a recession.
How Does a Recession Affect Americans?
As American consumers and businesses become more cautious, spending and investment declines, which can trigger layoffs and production cuts. While it's still too soon to say definitively whether or not the U.S. will enter a recession in the coming months, the risks are rising.
Can a Recession Help Homebuyers?
While an economic slowdown is typically seen as a bad thing, there is some silver lining when it comes to the housing market.
When the cost of financing a home goes down, it becomes more affordable for buyers; this can increase sales as more people can afford a home.
Mortgage Rates and Recession
Additionally, a slowdown can often mean home prices stabilize or decrease - this can be a good thing for buyers, as it gives them more negotiating power regarding price.
Concerns about a potential recession are mounting as the economy slows down. While it's difficult to predict precisely what will happen, history tells us that a recession could lead to lower mortgage rates for those looking to refinance or buy a home.
Buying a Home
If you're considering making a move, it's important to work with a trusted real estate professional who can provide expert guidance on what's happening in the housing market and how it might impact your plans. With their help, you can make the best decision for your unique circumstances, ensuring a smooth and successful transaction no matter what the future holds.
The Glass House Real Estate Team
We are passionate about empowering home buyers and sellers. Our team brings a wealth of knowledge and experience. We will help you seamlessly navigate the home buying or selling process stress-free.