Economists, housing experts predict next recession

by Steve Randall23 May 2018

A panel of economists and housing market experts have been asked to predict the beginning of the next US recession and what will be the cause.

Almost half of the 100-strong team of experts convened by Zillow believes that the most likely start of the downturn is 2020 and that will be triggered by monetary policy; specifically, a too-fast rise in interest rates.

And we won’t get far into the next decade before things turn negative, with the first quarter of 2020 the most predicted period.

"As we close in on the longest economic expansion this country has ever seen, meaningfully higher interest rates should eventually slow the frenetic pace of home value appreciation that we have seen over the past few years, a welcome respite for would-be buyers," said Zillow senior economist Aaron Terrazas.

Housing market crisis not expected to be the cause
The housing market is not expected to have a major influence on the recession, unlike the last one, with just 9% thinking so.

"Housing affordability is a critical issue in nearly every market across the country, and while much remains unknown about the precise path of the U.S. economy in the years ahead, another housing market crisis is unlikely to be a central protagonist in the next nationwide downturn,” added Terrazas.

For now, the panel believes there is more to come from the housing market with US home values forecast to rise 5.5% in 2018 to a median of $220,800. That improves on the panel’s 3.7% prediction made a year ago.

 

 


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