30% Say a Recession Would Make Them More Likely To Buy a Home — but Is That a Good Idea? Experts Weigh In

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For the past years, the economy has felt like it’s on a rollercoaster — one minute up, the next, stomach-dropping down. So, it might come as a surprise that nearly one-third of U.S. homebuyers say a recession would actually increase their likelihood of entering the housing market.

That is according to Realtor.com’s Q1 2025 survey. The figure is nearly double the share of buyers who said a recession would make them less likely to purchase a home. It may sound counterintuitive, but there is a logic behind this sentiment that deserves a closer look.

This mindset shift is emerging during a time of heightened economic anxiety. As of early 2025, more than 63% of prospective buyers believe a recession is on the horizon. This is one of the highest readings since 2019. A mix of rising interest rates, market volatility and new tariffs has intensified uncertainty, prompting widespread speculation about the Federal Reserve’s next move and its potential ripple effects.

Some buyers are leaning in, others are pulling back, and both groups have valid concerns. The key is understanding what is driving each outlook.

The Role of Economic Volatility in Potential Decision Making

For a certain segment of homebuyers, economic volatility is not necessarily a deterrent. In past recessions, home prices have declined and the Federal Reserve has often responded by cutting rates, which can lead to more affordable mortgages. While no outcome is guaranteed, the prospect of lower prices and reduced borrowing costs has encouraged some to move forward rather than wait.

“Buying a home during a recession can make financial sense,” said Steven Glick, director of mortgage sales at HomeAbroad. “If there is steady income, strong credit and a solid down payment, there is a chance to get more for the money and possibly at a lower interest rate.”

Still, the picture is not all upside.

Job stability often weakens during economic downturns. In 2020, for example, unemployment soared to 14.7%. Mortgage lenders also tend to tighten qualification standards, making access to financing more difficult. In the same Realtor.com survey, 13.5% of buyers identified poor credit as a key obstacle, while another 8.2% cited loan qualification as one of their top challenges.

Catherine Mack of House Buyer Network offers a more cautious view.

“It is tempting to pursue lower prices or take advantage of motivated sellers during a downturn, but mortgage rates are not guaranteed to fall,” she said. “If inflation remains high, they might rise instead. That is a tough scenario for anyone already pushing their financial limits.”

Hidden Costs, Apparent Challenges and a Silver Lining

There are also hidden costs that do not disappear during a recession. Property taxes, repairs and maintenance continue to add up.

“Many buyers underestimate these expenses,” Mack warned. “And once most of the liquidity is tied up in a home, financial flexibility decreases. Foreclosures tend to rise in recessions for a reason. The real winners are typically cash buyers with deep reserves who can act quickly on distressed sales.”

Inventory constraints remain one of the market’s most persistent challenges. In Q1, 44.3% of buyers said they could not find homes that met their needs. Although listings have started to rebound modestly, active inventory remains 16.3% below pre-pandemic levels seen from 2017 to 2019. Affordability is also a pressing issue, with 36% citing it as a major barrier. That number could increase if inflation accelerates further or if interest rates hold steady at current levels.

Another point of confusion is the assumption that a recession automatically leads to lower mortgage rates. That is not always the case, particularly if inflation remains elevated.

“There is a lot of understandable interest in discounted prices and less competition,” Mack said. “But if interest rates do not follow suit, the monthly cost of borrowing can still remain high.”

There are a few silver linings in today’s market. Overbidding, which once posed a major challenge, has become less common. Only 7.7% of buyers listed it as a top concern in Q1 2025, down from 10.4% the previous year. Homes are also spending more time on the market, and price trends are beginning to stabilize. These shifts could create a more favorable environment for those who have been waiting for conditions to ease.

The Bottom Line

Experts agree that market timing should take a back seat to financial readiness. Budget stress tests, careful planning for worst-case scenarios like job loss or unexpected rate hikes, and keeping total housing costs below 30% of gross income are critical.

For some, a potential downturn could mark a strategic opening. For others, the smarter path may be to hold off until both the economy and their personal finances are on firmer ground.

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