Recession fears have been creeping back into headlines—and for anyone thinking about buying or selling a home in the near future, that can lead to hesitation.
A recent consumer survey from John Burns Research & Consulting and Keeping Current Matters found that 68% of people are putting off real estate plans due to economic uncertainty. But here’s the twist: a large portion of those people aren’t necessarily worried about a recession—they’re hopeful it could bring better timing.
According to Realtor.com, nearly 30% of potential buyers say they’d be more likely to purchase during a recession. Why? Many are banking on the idea that a downturn could push mortgage rates lower, potentially making homes more affordable.
And on the surface, that logic makes some sense.
Why Some Buyers Are Waiting for a Recession
Historically, recessions have often led to lower mortgage rates. When the economy slows, the Federal Reserve often responds by cutting interest rates to stimulate growth. As a result, mortgage rates tend to decline. In fact, if you look at the last six recessions in the U.S., mortgage rates dropped every single time. That pattern can be encouraging for buyers, especially first-time buyers or those with limited down payments.
Here’s a quick breakdown of how mortgage rates responded during past recessions:
- 1980 Recession: Rates dropped from 16% to 11.75%
- 1991 Recession: Rates fell from 10.6% to 8.1%
- 2001 Recession: Rates declined from 7.1% to 6.5%
- 2008 Great Recession: Rates dropped from 6.5% to 4.8%
- 2020 Pandemic Recession: Rates plummeted from 3.7% to 2.7%
This trend is what fuels the idea that waiting for a recession could mean a better rate.
But There's a Flaw in That Strategy
While lower mortgage rates could be in the cards during a downturn, there’s a major misconception that tends to follow: that home prices will also fall. And that’s where things get risky for would-be buyers waiting on the sidelines.
Here’s the reality: home prices don’t typically drop during recessions.
According to long-term data from CoreLogic (now Cotality), home values actually went up during four of the last six recessions. Here’s what the numbers look like:
- 1980 Recession: Home prices ↑ 6.1%
- 1981 Recession: Home prices ↑ 3.5%
- 1991 Recession: Home prices ↓ 1.9%
- 2001 Recession: Home prices ↑ 6.6%
- 2008 Recession: Home prices ↓ 19.7% (The exception—driven by a housing crash and oversupply)
- 2020 Recession: Home prices ↑ 6.0%
This means the only time prices dropped significantly was during the 2008 crash—an outlier caused by faulty lending practices, over-leveraged buyers, and too much inventory. That environment simply doesn’t exist today.
In fact, the biggest challenge in today’s market is the opposite: not enough homes for sale. Even with inventory levels rising slightly in 2024 and 2025, supply remains well below historical norms, especially in highly desirable markets like Chicago’s North Shore suburbs—Highland Park, Deerfield, Northbrook, Glencoe, Wilmette, Lake Forest, and others.
Today’s Prices Are Sticky—and Not Likely to Drop
Home prices tend to follow their existing trend unless a major disruptive force intervenes. Right now, across most U.S. metros and especially in the Chicagoland area, prices are rising—but at a more moderate pace than in the past few years. That’s not a bubble; it’s market normalization.
As Robert Frick, Corporate Economist at Navy Federal Credit Union, put it:
“Hopes that an economic slowdown will depress housing prices are wishful thinking at this point.”
He’s right. If you’re holding out for a “deals market,” you may be waiting a long time. Here's why:
- Demand is still strong: Millennials and Gen Z are entering prime homebuying years.
- Inventory remains tight: Builders haven't caught up with demand, especially in suburban markets where schools, safety, and lifestyle are key drivers.
- Sellers aren’t desperate: Many homeowners are financially stable, locked into low interest rates, and not under pressure to sell.
Even if rates were to fall during a recession, home prices likely wouldn’t. And that means any savings you gain on a rate could be offset by paying a higher price—or facing more competition from others who jump back into the market.
The Local Perspective: North Shore Chicagoland
Here in the North Shore suburbs, we’re seeing a version of this trend play out in real time. For example, according to recent MLS data:
- Highland Park saw home values rise 4.5% year-over-year as of May 2025.
- Northbrook inventory has grown slightly but remains under 2.5 months—well below a balanced market.
- Wilmette and Glencoe continue to attract move-up buyers and city transplants, keeping demand high despite interest rate volatility.
Even during periods of national slowdown, desirable local markets tend to hold their value—or appreciate slowly—because demand stays steady.
So, What’s the Smarter Strategy?
Waiting for a recession might sound like a savvy move. But in reality, you could miss out on long-term equity growth, better home choices, and market timing that works for your personal life—not just the headlines.
Here are a few considerations if you’re still on the fence:
- If mortgage rates drop: You can always refinance.
- If home prices rise: You’ve locked in a lower cost now.
- If your life situation is changing: Waiting may not serve your real needs.
Whether you’re upsizing, downsizing, or moving for lifestyle reasons, your timeline and goals should drive your decision—not speculation about the next economic dip.
Bottom Line
If you're holding off on buying or selling in hopes a recession will improve your odds, it’s worth taking a closer look at the facts. Yes, mortgage rates might come down during a slowdown. But home prices are unlikely to follow—especially in strong, high-demand markets like Chicago’s North Shore.
Instead of waiting for a market that may never come, let’s focus on what’s happening now—and how to make it work for you.
Thinking about buying or selling this year? Let’s connect. We’ll help you build a strategy that fits your needs, budget, and timing so you can make a move with confidence, no matter what the economy is doing.
