Inflation rates have been high and there is talk of a recession. Sound familiar? This was a similar story back in 2008. Back then the economy dove down into a deep recession and home values plummeted. However, this time a real estate recession is not likely as prices and demand remain stable. Here are a couple key differences from the last Recession:

Home Prices Still Increasing

The past few years homeowners have been enjoying property value increases. In fact, according to an article written by Anna Bahney for CNN Business, "Home prices rose 18.8% in 2021, according to the S&P CoreLogic Case-Schiller US National Home Price Index, the biggest increase in 34 years of data and substantially ahead of 2020's 10.4% gain." The forecast is that home prices will continue to rise, but at a slower rate. There are still buyers on the market because there has been a lack of inventory of homes for sale for buyers to purchase.

Equity in Homes

The increase in the values of homes has blessed homeowners with more equity in their homes. If there is a recession and money is tight, homeowners will be able to tap into their equity if the need arises. Homeowners can borrow against the equity in their homes with a home equity line of credit (HELOC) or obtain a second mortgage on their homes. Homeowners will not need to foreclose on their homes or sell them short like they did the last time around when the market tanked in 2008. In fact, according to the article on, written by Diana Olick, Here's Why This Housing Downturn is Nothing Like the Last One, "Total mortgage debt in the United States is now less than 43% of current home values, the lowest on record. Negative equity, which is when a borrower owes more on the loan than the home is worth, is virtually nonexistent."

Homes for Sale Inventory Increasing

The inventory of homes for sale has been at historic lows of late. There are still many buyers on the market for homes because so many of them haven't been able to purchase one. In an article on, written by Lance Lambert, "The pandemic's housing boom saw inventory- the number of unsold listings- fall to four-decade lows. By March, nationwide inventory levels on Zillow were 64% below March 2019 levels." Lambert cites that between the end of March and the beginning of May, inventory levels rose 10% nationwide. Inventory levels continue to rise which is slowly balancing out the market. This market correction is what will allow more buyers to be able to purchase homes. This correction, or balance, is what will bring down the rate of home price increases to a more normal increase year-over-year.

Interest Rates Still Low

Even though interest rates have been mostly rising, they are still relatively low compared to historic rates. According to, interest rates are hovering just below 5% with the average of 4.99% for a 30-year fixed rate mortgage (FRM.) as of August 4th. Interest rates got so low during the last two years that they were breaking historical records. The interest rates rising is part of the economic cycle that is necessary to balance out and correct the market.

Less Risky Loans

After the last housing recession that started in 2008, the mortgage industry has new lending regulations. This has resulted in less risky loans and fewer mortgage delinquencies. Back then, it was a joke in the real estate and mortgage industry that anyone with a pulse could obtain a home mortgage. This is just not true anymore. It is more difficult to get a home loan and buyers have to go through more hoops to do so.

For these reasons combined, a real estate recession isn't likely. The market will correct itself as every historical, record-breaking real estate market does.