Source: Yahoo Finance —
Historically speaking, most U.S. recessions arrive after a period of rate tightening by the Federal Reserve. As the Fed raises interest rates to tame inflation, it begins to cause economic activity to contract. Of course, “Fed-induced recessions” usually start in the housing market.
We’re already seeing it.
Not long after mortgage rates spiked this spring, the U.S. housing market slipped into a housing downturn. That housing downturn has seen new- and existing-home sales slump across the country. In some markets, like Seattle and Las Vegas, it has already spurred a home price correction.
The silver lining for agents and builders? Usually, the U.S. housing market is FIFO: first into the recession and first out of the recession. The big exception was the housing bubble, which saw the U.S. housing market slip into a downturn in 2006. That downturn, which lasted through 2011, was three times as long as the Great Recession.
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