SANTA CLARA, Calif.,
Aug. 28, 2019 /PRNewswire/ -- An
increasing number of home buyers expect a U.S. recession in the
next three years, according to new survey data released today from
realtor.com®, the Home of Home Search℠. Although they
remain optimistic that it will be milder than the Great Recession,
more than half of current home shoppers expect to put their home
search on hold until the economy recovers.
More than 36 percent of the 755 active buyers surveyed by Toluna
Research this month expect the next recession to begin sometime in
2020. When the same question was presented to 1,015 home shoppers
in March 2019, just under 30 percent
indicated they expected a recession in 2020. Additionally, 17
percent of current shoppers expect a recession to hit sometime in
2019, 14 percent expect sometime in 2021, and 7 percent expect
sometime in 2022. Eight percent expect sometime in 2024 or later
and 17 percent reported they didn't know. Active buyers are defined
as consumers who are currently shopping for a home.
As anxiety over a potential recession continues to rise in the
U.S., the home shoppers recently surveyed are prepared to hit the
pause-button on their home search until the clouds clear. Nearly 56
percent reported that if a recession hit they would halt their home
search until the economy improved.
"Economic activity is cyclical, so yes, undoubtedly we will face
another recession at some point in the future, but we do not expect
it to be anything like 2008," said George
Ratiu, senior economist at realtor.com®. "The
next recession will likely be driven by factors outside of housing,
such as a prolonged trade war, cutbacks in corporate spending or
contagion from a European recession. Unlike 2008, mortgage
underwriting has been more disciplined and regulated, which should
provide a more secure foundation for housing during the economic
ups and downs."
Despite recession concerns, home shoppers also believe a future
downturn will be less severe than the housing crisis. Earlier this
spring, 36 percent of home buyers were concerned that a future
recession would be worse than 2008. However, that number has
dropped slightly to 35 percent since then. News of trade wars and
weakening economies globally dominate the headlines, but overall
home buyers are more optimistic than they were in March 2019. Nearly 44 percent of current shoppers
feel an upcoming recession will be less severe than 2008, up from
40 percent this past spring. Twenty-two percent feel it would be
the same.
Moreover, home shoppers' views toward homeownership have become
more optimistic. According to the survey, nearly 50 percent of home
shoppers revealed they think more favorably about homeownership
after the 2008 recession. This is up from nearly 45 percent earlier
this spring. The share of home shoppers who said they felt very or
slightly pessimistic toward homeownership following the 2008
recession dropped slightly from nearly 22 percent in March to 21
percent this August.
While potential buyers are becoming more confident and hopeful
toward housing, those who are not currently shopping for a home
have a much more bleak view of homeownership. According to the
survey, 32 percent of active buyers indicated they are a lot more
optimistic toward homeownership following 2008, whereas only 7
percent of non-buyers felt this way. In similar fashion, non-buyers
are nearly twice as likely, at 11 percent, to feel very pessimistic
or slightly more pessimistic toward homeownership following 2008,
versus just 6 percent for active buyers.
"When warned about an incoming storm, Americans know to prepare
by stocking up on necessities and reinforcing their shelter.
Similarly, given the cyclical nature of economic activity,
consumers can and should prepare for the next downturn now. Taking
steps to shore up their financial well-being, strengthening their
professional networks and having adequate savings would provide
cushioning during the slowdown," Ratiu noted.
About realtor.com®
Realtor.com®,
The Home of Home Search℠, offers the most MLS-listed for-sale
listings among national real estate portals, and access to
information, tools and professional expertise that help people move
confidently through every step of their home journey. Through its
Opcity platform, realtor.com® uses data science and
machine learning to connect consumers with a real estate
professional based on their specific buying and selling needs.
Realtor.com® pioneered the world of digital real estate
20 years ago, and today is a trusted resource for home buyers,
sellers and dreamers by making all things home simple, efficient
and enjoyable. Realtor.com® is operated by News Corp
[Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a
perpetual license from the National Association of
REALTORS®. For more information, visit
realtor.com®.
CONTACT: Cody Horvat,
cody.horvat@move.com
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SOURCE realtor.com