Waiting for the Market To Drop? You Might Miss Your Shot

With more talk of a possible recession in the headlines, it’s no surprise that many potential homebuyers and sellers are pausing their plans. A recent study by John Burns Research and Consulting and Keeping Current Matters reveals that 68% of people are delaying their move due to economic uncertainty.

But here’s the twist: not everyone is waiting out of fear — some are waiting out of hope.

Why Some Buyers Are Holding Off

According to Realtor.com, nearly 30% of homebuyers in early 2025 said a recession would make them more likely to buy. Why? Because they believe a slowdown might lead to lower mortgage rates — making homes more affordable.

That thinking isn’t completely off base. Historically, mortgage rates tend to drop when the economy slows down. During each of the last six recessions, mortgage rates fell — making borrowing more attractive (see chart).

So, yes — if a recession happens, lower rates could be a real possibility. But there’s a catch...

Will Home Prices Drop Too? Probably Not

While many buyers are banking on prices falling along with rates, that’s not how things typically play out.

Data from Cotality (formerly CoreLogic) shows that in 4 of the last 6 recessions, home prices actually went up. The 2008 crash was the exception — not the rule — and was caused by a unique housing market crisis, not just an economic slowdown.

Right now, even with more homes hitting the market, we’re still dealing with a long-term shortage in housing inventory. That’s one of the key reasons prices are continuing to hold steady or even rise — just at a slower pace.

As Robert Frick, economist at Navy Federal Credit Union, puts it:

“Hopes that an economic slowdown will depress housing prices are wishful thinking at this point . . .”

What This Means for You

If you’re holding out for a recession in hopes that prices will plummet, you could be waiting for something that never happens. Mortgage rates may drop — but prices likely won’t. And when rates do go down, buyer competition typically heats up, which can drive prices even higher.

Bottom Line

If you're thinking of making a move, waiting for a recession to “time the market” might not work out the way you expect.

Rather than relying on headlines or hope, let’s sit down and build a strategy that works for your goals and today’s market.