We’ll get another recession someday. Maybe in a year. Maybe in 7 years. Who knows?
Whenever an economic contraction occurs, we’re likely to see lower rates. These things aren’t scientific but mortgage rates have fallen by an average of around 1-2% during past recessions.
If that happens this time around I think you’re going to see an explosion of housing activity from pent-up supply and demand that has been sitting on the sidelines. We could also see a big uptick in cash-out refis and HELOCs if rates are at more reasonable levels because so much equity is tied up in homes these days.
People would be very confused by this but the housing market already went through a recession so it wouldn’t surprise me to see it lead us out of the next one.
-Ben Carlson, as cut-and-pasted from here
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