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Housing Market Crash 2020: Things You Need to Know

Housing Market Crash 2020: Things You Need to Know

Anxiety regarding housing prices and the possibility of a global recession have been grabbing headlines in recent days. Homebuyers watch as prices continue to skyrocket in key markets. Homeowners fear that this lift in prices is unsustainable and that a crash could see property purchasers underwater on a mortgage. So, is a global market recession really imminent? Let us take a look at both sides of this potentially blood-curdling story.

Housing Market Crash: Maybe So

People fear a housing market crash for various reasons. Some of these reasonings include the below.

  • The Federal Reserve is threatening to increase interest rates. While the action could pump the brakes on an economy that many fear is growing irresponsibly quickly, it would ultimately make homes more expensive to buy. Critics fear that it could stifle American real estate markets.
  • China and the U.S. remain in a trade war. The U.K. is preparing to exit the EU, likely in a chaotic fashion. Tensions are mounting between Japan and South Korea. The Amazon burns in South America. With so much unrest, people rightly fear that global markets could be adversely affected.
  • Housing prices are too high for some.

America is entering its longest-ever economic expansion. Historically, such periods are always followed by recessions, as white-hot securities and housing markets return to historical norms.

Housing Market Crash: Maybe Not

Others believe that we might not experience a housing crash in 2020. Economists are notoriously not very accurate at predicting such events. Furthermore, the sheer size of the Millennial generation (now entering their mid-twenties to mid-thirties) means that a vast number of young people in America need to buy properties. It is possible that this could help stave off a severe housing recession, at least for a while.

When the Crisis Hits

Experts state that a recession will eventually come. When it does, housing prices will be affected at least somewhat.

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