This month, the United States set a record for the longest economic expansion. However this is forecasted to end in 2020.
According to a panel of housing experts and economists, the next recession is expected to hit in 2020. A few even said it may begin later in 2019, while another substantial portion predict that a recession will occur in 2021. But unlike last time, the housing market won’t be the cause.
Trade policy, a geopolitical crisis and/or a stock market correction were the identifying factors found by the panelists to cause the recession. But that doesn’t mean that housing will be immune to the effects of a recession.
“Housing slowdowns have been a major component, if not catalyst, for economic recessions in the past,” said Skylar Olsen, Zillow director of economic research. “But that won’t be the case the next time around, primarily because housing will have worked out its kinks ahead of time.”
Even if a housing slowdown won’t be a contributing factor to the cause of the recession, 51% of the panelists expect that home buying will be lower in 2020, while 17% think home buying will increase.
“The current housing slowdown is in some ways a return to balance that will help increase the resiliency of the housing market when the next recession does arrive,” said Olsen. This means homes will stay on the market longer, and bidding wars will be less common.
The current expansion has broken the record of the previous one, 120 months, between 1990 and 2001. Beginning in 2009, this expansion sent the unemployment rate to a half-century low and subdued inflation.