The changes of another recession are essentially 100 percent—at some point in time we will almost certainly have another recession. What does this mean for homeownership? In the case of homebuyers, possibly much less than one would think.
The average homeowner stays in their home for approximately 10 years. Over that time frame the homeowner with a 30 year mortgage builds equity in addition to the down payment. Most decisions to sell and move are optional (downsizing, right sizing, retiring, etc.). Absent a job loss, most homeowners appear to have the option of “riding it out”; that is staying in place. Recessions are nasty economic experiences. The graph, with recessionary periods darkened, shows that a recession can slow down employment, but even during a recession most people have jobs: raises may vanish, and there may be gloom, but life goes on. A recession should not have a major impact on homeownership if the homeowner has made prudent decisions—i.e., not getting over extended, staying within budget, not speculating, and exercising financial responsibility. Homeownership has major benefits, but also requires financial maturity.