Does the Housing Recession Tell Us Anything About the Prospects of an Actual Recession?
November 7, 2022
Housing declines are historically a harbinger for recessions, but does this mean that it a recession is imminent?
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Thom holds the position of professional, economist in the Office of the Chief Economist at CoreLogic. He is responsible for analyzing housing markets and home price trends. He has an extensive background in urban and real estate economics and applied econometrics.
Before joining CoreLogic, he held positions at the University of Virginia, Georgia Tech, and Harvard University. He earned his bachelor’s degree in economics, statistics and history at the University of Auckland, his master’s degree in economics from Tufts University and his doctorate in urban planning and development from the University of Southern California.
Housing declines are historically a harbinger for recessions, but does this mean that it a recession is imminent?
Home price appreciation dropped in July for the first time since December 2018, ending a 40-month streak of growth.
The share of single-family homes purchased by investors went from 16% in 2020 to 24% in 2021, and the outsized presence of mega-investors raises concerns that they are driving up prices and muscling potential homeowners out of the market.
The share of single-family home purchases made by investors dropped by 8 percentage points from Q1 to Q2, suggesting that these buyers may be more sensitive to interest rate increases than owner-occupied buyers
Looking at appreciation alone does not convey the full benefits of owning a home. This is more accurately measured by the sum of price appreciation and rental income flows—the total appreciation.
Nationally, new home sales have increased their downward slide and have been down over 13% for every month of 2022. Compared to May 2020, at the height of the shutdowns, the decline was only 10%.