More than half of the people currently searching for a home say they will put their search on hold until they see recovery in the economy, according to realtor.com.
An increasing number of homebuyers expect a recession in the next three years, yet remain optimistic that it will be weaker than the Great Recession.
"Economic activity is cyclical, so yes, undoubtedly we will face another recession at some point in the future, but we do not expect it to be anything like 2008," said George Ratiu, senior economist at realtor.com.
More than 36% of the 755 active buyers surveyed said they expect the next recession to begin in 2020. In March, less than 30% of the 1,015 surveyed said they expected a recession in 2020.
However, 17% of current home shoppers expect a recession to hit this year, while 14% said they think it will hit in 2021, 7% said sometime in 2022 and 8% expect it to happen in 2024. Just 17% reported they don’t know when a recession would happen.
"The next recession will likely be driven by factors outside of housing, such as a prolonged trade war, cutbacks in corporate spending or contagion from a European recession. Unlike 2008, mortgage underwriting has been more disciplined and regulated, which should provide a more secure foundation for housing during the economic ups and downs," Ratiu said.
Last month, Zillow predicted that trade policy, a geopolitical crisis and/or a stock market correction would be the underlying cause of the recession.
Earlier this year, 36% of homebuyers said they believed this possible recession would be worse than in 2008. Now, only 35% believe so. However, 44% of home shoppers said they think this recession won’t be as bad as the 2008 recession, showing improvement from the 40% this past spring.
Meanwhile, 50% of shoppers said they thought more optimistically about the housing market, up marginally from 45% earlier this year. Only 21% feel more pessimistic about a possible recession.
"When warned about an incoming storm, Americans know to prepare by stocking up on necessities and reinforcing their shelter. Similarly, given the cyclical nature of economic activity, consumers can and should prepare for the next downturn now. Taking steps to shore up their financial well-being, strengthening their professional networks and having adequate savings would provide cushioning during the slowdown," Ratiu said.