Lately, the media has been filled with headlines about the economy, fueling growing concerns about a potential recession. If you're thinking about buying or selling in communities like Tacoma, Puyallup, Auburn, or Bonney Lake, you might be wondering how this could impact the housing market—especially home values and your buying power.
Let’s break it down using historical trends that might surprise you.
A Recession Doesn’t Automatically Lead to Falling Home Prices
There’s a widespread misconception that a recession automatically causes home values to crash, likely because of what happened in 2008. But the truth is, that was an outlier. Looking back at the past six recessions, home prices actually increased during four of them. The 2008 housing crisis was unique because it was directly caused by issues within the housing sector itself, including a massive oversupply of homes and reckless lending practices.
In today’s market—whether you're eyeing homes in Sumner, SeaTac, or Des Moines—inventory remains relatively low, which continues to support home values. Even in areas like Burien, Normandy Park, Lake Tapps, and surrounding neighborhoods where listings have slightly increased, there’s still not enough supply to cause any major price drops.
Mortgage Rates Tend to Drop During Recessions
While home values tend to stay steady or climb, mortgage rates usually decline during economic slowdowns. In fact, in each of the last six recessions, mortgage rates have dropped—sometimes significantly—making it more affordable to borrow.
That means if you're looking to buy in Puyallup, Auburn, or anywhere across the South Sound, a future dip in rates could boost your purchasing power. However, it’s wise not to wait around for the return of ultra-low 3% mortgage rates. Experts agree that while rates may ease, they likely won’t go back to pandemic-era lows.
Bottom Line
A recession doesn’t necessarily spell trouble for the housing market—especially not in our growing Puget Sound communities. Whether you're buying your first home or thinking of selling in Tacoma, Lake Tapps, or beyond, knowing the facts helps you stay grounded.
If you’re wondering how the market is behaving in your area and want a local expert's insight, I’d love to help.
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