Interest Rates In A Recession

History Doesn’t Always Repeat Itself But We Can Learn From It

Recession.

It’s a word that can spark fear and uncertainty in any market, and housing has no exception.

But contrary to what you may think, you don’t have to fear the word recession when it comes to buying a home. Here’s why.

Take a look (in the video) at what trends are happening to interest rates in a recession.

Historically, a recession means falling mortgage rates, but during the past six recessions in this country, mortgage rates have dropped. And while we’re not officially in a recession just yet, there are a number of experts that say it could happen within the next 12 months.

And if we experience a recession, this would be an indicator of how rates respond.

While history doesn’t always repeat itself, we can learn from it. And if you have questions about what’s happening in the housing market, let’s connect by calling (440) 628-1321 .

While there’s no such thing as perfect advice, I follow what the experts say and the data they are providing to give you the best possible advice.

What Happens To Interest Rates In A Recession Historically

During recessions, interest rates tend to decline as a result of central banks taking measures to stimulate economic growth. The Federal Reserve, for example, may lower the federal funds rate, which is the interest rate at which banks lend money to each other overnight. When the federal funds rate is lowered, other interest rates, such as mortgage rates and business loans, may also decline.

The goal of lowering interest rates is to encourage borrowing and investment, as well as to make it cheaper for consumers and businesses to take out loans. By making it easier and more affordable to borrow money, central banks hope to stimulate economic activity and boost consumer and business spending.

Historically, interest rates in a recession tend to go lower.

For example, during the Great Recession of 2008-2009, the Federal Reserve lowered the federal funds rate to near zero and engaged in several rounds of quantitative easing, in which it purchased large amounts of government bonds and other securities in an effort to stimulate the economy.

However, it’s important to note that interest rates can also be influenced by other factors, such as inflation, geopolitical events, and global economic trends. While interest rates may generally decline during a recession, they can also be influenced by other factors that are unique to a particular economic environment.

Interested in buying a home and want to better understand our local market, contact us today at (440) 628-1321 .

A few more helpful articles

Past Recessions Leave Clues About the Housing Market

Brecksville Homeowners Selling Your House in Today’s Market Want to Know

What Hinckley Buyers and Sellers Need to Know About Market Conditions

What The Volatile Stock Market Means For Those Buying or Selling Real Estate in Broadview Heights

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