If you’re worried that there might be a recession soon, you’re not the only one. People have been talking about the possibility of a recession for the past couple of years, and many are concerned it could lead to a lot of people losing their jobs. Some are even afraid that it might cause a lot of homes to be taken away, like what happened 15 years ago.
But there’s some good news. The Wall Street Journal did a survey, and it shows that, for the first time in more than a year, less than half (48%) of the experts they asked think a recession will happen in the next year. Here’s a quote from the survey: “Economists are turning optimistic on the U.S. economy… economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.”
So, if more than half of these experts don’t think a recession will happen in the next year, it’s likely they also don’t expect a lot of people to lose their jobs. The graph below, based on the same survey, shows what these experts predict for the unemployment rate over the next three years (see graph below).
If the predictions made by those experts turn out to be accurate, more people might face job losses in the coming year. Job losses are tough for individuals and their families.
But the important question is whether these job losses will be enough to trigger a surge in home foreclosures, leading to a collapse in the housing market. Looking at the past patterns from Macrotrends and the Bureau of Labor Statistics (BLS), it seems unlikely. This is because the current unemployment rate is very low compared to historical records (check the graph below).
Bottom Line
The majority of economists no longer anticipate a recession within the next 12 months. Consequently, they do not foresee a significant increase in the unemployment rate, which would be the catalyst for a surge in foreclosures and a subsequent housing market crash. If you have any questions regarding unemployment and its potential effects on the housing market, feel free to reach out. Let’s connect and discuss.
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Wed, 13 Dec 2023 21:21:02 +0000
by Mottek Group