22 States in or Near a Recession Right Now — and What It Means for Residents
Written by
Nicholas Morine
Edited by
Zuri Anderson
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In a recent Moody’s Analytics report detailed by Realtor.com, a somewhat grim scenario emerged for nearly half of U.S. states — according to Moody’s, those states were either embroiled in a recession or at high risk of entering one.
GOBankingRates dives deep into which states are being affected and what that means if you live in one of them.
States in or Near a Recession
The list of states provided included:
- Connecticut
- Delaware
- Georgia
- Illinois
- Iowa
- Kansas
- Maine
- Maryland
- Massachusetts
- Minnesota
- Mississippi
- Montana
- New Hampshire
- New Jersey
- Oregon
- Rhode Island
- South Dakota
- Virginia
- Washington
- Washington, D.C.
- West Virginia
- Wyoming
Moody’s chief economist Mark Zandi made a few remarks over the data, noting that D.C., in particular, was being affected by job cuts and the nature of the federal government shutdown.
Further, Zandi noted, there was a bit of a silver lining.
“Southern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of U.S. GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn,” he said, although both states were listed as “treading water” as part of the Moody’s infographic.
Unemployment Claims Up in Some Potentially Recessionary States
According to data provided by the Economic Policy Institute (EPI), collating Department of Labor submissions from individual states, unemployment insurance claims are significantly up in Washington, D.C., as well as in other states singled out by the Moody’s report.
“In D.C. proper, federal continued claims increased over 1,000% from the same time last year. In nearby Maryland, federal claims are up over 500% and federal claims in Virginia are double compared with the same period in 2024,” the EPI reported.
“While the national numbers of continued UI claims are not yet showing up as recessionary, there are clearly pockets of this country that are experiencing greater labor market weakness,” it added. “For example, year-over-year percentage increases in continued claims for the District of Columbia, Virginia and Maryland are 53%, 29% and 25%, respectively. These states represent three of the five highest year-over-year increases, with Connecticut (47%) and Oregon (27%) being the other two states according to the latest data for the week ending [Sept.] 27, 2025.”
States Entering Recession Could Harm Local Housing Markets
And as Realtor.com senior economist Jake Krimmel pointed out, the effects of a widespread recession hitting so many states at once could center around housing markets — both for prospective buyers as well as existing homeowners looking to make onerous mortgage payments.
“Whether nationwide or localized, recessions are bad for housing markets. The direct effects of an economic slowdown are higher unemployment, less hiring and lower wages — all killers for would-be homebuyers and all warning signs for current homeowners trying to make mortgage payments,” Krimmel said.
Despite this, as Krimmel underscored, it appeared as if — at least for now — the portions of the country which are teetering on the brink of recession, if not already dealing with this economic scenario — notably New York and the rest of the Northeast — appear to have the strongest housing markets in the U.S. at the current juncture.
On the other hand, softer housing markets — with Texas, Florida and Arizona being singled out — were simultaneously flagged as having weaker price growth and more sluggish housing inventories, despite being listed by Moody’s as having “still-expanding economies.”
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