Economic Concerns Unlikely to Derail Housing Market
After several years of mediocre economic growth, there are a few indicators suggesting the economy may be entering another recession. Real estate professionals are debating the impact these rumors will have on the housing markets.
Ohio homeowners, buyers and real estate professions are particularly concerned. The housing market has finally rebounded after years of sluggish growth. While their fears are understandable, they appear to be overhyped. The market is likely to maintain steady growth for the foreseeable future.
Economic Outlook Remains Unclear
Over the last couple of weeks, economists have been discussing the possibility of a new recession. Some experts feel a downturn is inevitable, while others argue those fears are overblown. However, almost all agree the economy is facing some challenges.
The Federal Reserve may choose to hold off a new rate hikes if concerns about an economic downturn worsen. Their monetary policy decisions could affect the housing market in Ohio and the rest of the country.
How will the Direction of the Economy Affect Ohio Housing Markets?
It’s still too early to tell whether the US is about to enter another recession. However, some reports have alluded to the possibility. Last month, the BLS reported that GDP only drew 0.7% in the fourth quarter. The next GDP report could show economic growth stalled further. The BLS could also revise fourth-quarter estimates lower, which would indicate the country slipped into recession.
While this could be a cause for concern, another recession would not necessarily be devastating for Ohio residents. It could be a much milder than that 2008 crash, so it may have little effect on housing prices or sales.
Nevertheless, the Fed has been very cautious about raising interest rates for since the recovery began in 2009. If they see new signs that the country is slipping back into recession, they may choose not to raise rates or even reverse the December rate increase.
Even if these events unfold, it’s difficult to know exactly how they affect the housing market. Suppressing interest rates longer could actually spur market growth, because buyers can more easily afford financing. However, and economic downturn could also harm wages and job growth, which would bar many people from the housing market.
While there is some cause for concern, it’s highly unlikely the housing market will suffer like it did during the last economic crash. Home buyers and sellers shouldn’t be alarmed about any rumors they hear about the new recession.