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Drew Angerer / Stringer/Getty Images November 07, 2022 Rae Hartley Beck is a writer and editor with over eight years of experience in personal finance. Her work has most recently appeared in Bankrate, MoneyWise and Investopedia. Rae specializes in credit card rewards, investing, real estate, home improvement, lending and financial advice for millennials, Gen Z, Gen Alpha and their parents. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Will there be a recession soon? Some say yes, some say no, but according to a , nearly 70 percent of Americans are worried about it. If you’re selling your home amid all this uncertainty, what factors do you need to consider? Here’s everything you need to know about selling a house in a recession — and before one. Recessions and housing
While the current housing market is and some think a recession is looming, today’s economic circumstances differ from the Great Recession. The crash of 2007–2008 was fueled by a and lax lending requirements, causing the market to be flooded with a wave of . But this time around, the cooling housing market is a symptom, not a cause, of the economic downturn. The several times this year to , which has left homebuyers with pricier mortgage payments and less purchasing power. In addition, the National Association of Realtors’ most recent numbers on show that inventory is still low, down 0.8 percent year-over-year. And foreclosure rates are lower than they were before the start of the pandemic. What all this means for home sellers is that a flood of cheap homes hitting the market and driving down prices is unlikely. may struggle to purchase your home if mortgage rates remain high, and your home for as much as it could have gotten during the height of the . But the shortage of available homes for sale means that your home is unlikely to sit on the market for the extended lengths of time some sellers experienced during the Great Recession. Should you sell your home before a recession
That depends on whether you really have to. “Unless you have a surplus of homes, selling means moving to or buying another home,” says , CFA, Bankrate’s chief financial analyst. “Selling a home incurs tens of thousands of dollars in and , and buying another home also involves thousands of dollars in closing costs. Why incur those costs and put yourself through it unless your lifestyle truly requires it?” If you must sell your home, selling it before a recession hits and the scale tips in favor of buyers is smart. This will likely net you a faster sale, at a higher price and with fewer . It’s true that right now, but more buyers will be able to qualify for a mortgage now that they would in a recession, which typically comes with job losses and serious belt tightening. Should you sell your home during a recession
On the other hand, the throes of a recession might be the worst time to sell a home. During a recession, potential buyers may experience a sharp decline in income, affecting their ability to be approved for a mortgage. If your local economy depends on a few large industries or companies and those companies go under or lay off a portion of their workforce, it will certainly affect your ability to sell your home. But even if your local economy is relatively untouched, your home’s sale could still be affected by a national recession. Lending requirements typically become stricter during recessionary periods, meaning buyers who would otherwise qualify may have difficulty . And when there are more homes for sale than people qualified to purchase them, that’s a — which means sellers can expect their home to take longer to sell, at a lower price and with less favorable terms. An alternative to selling
Your life circumstances — a new job, marriage or divorce, for example — may make it necessary to sell your home even during a recession. But if you can afford to wait it out, you may be able to rent the home for more than the cost of your mortgage payments. throughout the country, with the average nationwide rent pushing $2,100 per month as of September 2022. Speak to a property manager in your area to get an idea of how much you could expect to net after expenses if you opt to rather than sell. It may be financially smarter to rent out your home until the recession eases and you can sell it for more, especially if you have relatively low monthly payments. Are we in a recession right now
It may to the many Americans struggling to keep up with inflation. But officially, we aren’t. The nation isn’t officially in a recession until the National Bureau of Economic Research declares one, and that has not happened — at least, not yet. If we do have a recession, It’s “too early to say with any confidence exactly when it will begin and end,” McBride says. “It is likely to be comparatively mild when sized up to the great financial crisis of 2008, or even the short but very deep recession brought on by the pandemic in 2020.” And if you’re putting your home-selling plans on the back burner to wait out the economic uncertainty, rest assured you won’t have to wait forever. “Recessions are not fun, but they are a normal part of the economic cycle,” McBride says. “Just as winter ends and spring begins, recessions end and recovery begins.” SHARE: Rae Hartley Beck is a writer and editor with over eight years of experience in personal finance. Her work has most recently appeared in Bankrate, MoneyWise and Investopedia. Rae specializes in credit card rewards, investing, real estate, home improvement, lending and financial advice for millennials, Gen Z, Gen Alpha and their parents. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles