The housing market nosedived during the Great Recession, as the CoreLogic HomePrice Index decline 33% from April 2006 to March 2011.
However, the years to come brought stable job growth, mortgage funding and underwriting, and the housing market was able to recover. CoreLogic recently released a special report, “The Role of Housing in the Long Economic Expansion,” which chronicles the housing market’s performance during economic expansion.
Since Q1 2010, the total number of U.S. residential properties in negative equity has fallen by more than 21%. The volume of homes in negative equity from 2012 and 2013 went from 22.4% to 15.5%, and the average homeowner gained $35,100 in equity.
Total home equity by Q1 2019 reached a record $15.8 trillion, compared to just $6.1 trillion a decade earlie.
CoreLogic also states that the recession led to an influx of renters as homeowners struggled with home value loss. From Q3 2019 to Q4 2012, the homeowners population plummeted, while 12.9 million homes joined the rental market.
However, by the end of Q1 2019, there were 1.1 million new homeowners and just 458,000 renters. The lack of inventory, though, caused home prices to rise.
Additionally, Q1 2006 saw flipped homes make up 11.3% of the market. By the end of the recession, though, the share of flipped homes fell 4.6%. The flip rate increased and reached its highest point of 11.4% in Q1 2018.
Moving forward, CoreLogic states the U.S. economy “looks positive,” but experts are split on whether another recession is on the horizon.
CoreLogic, though, believes continued growth is ahead for housing. The CoreLogic HPI forecast predicts a moderate, but healthy, 5.6% annual growth in home prices from June 2019 to June 2020.
A survey by the National Association of Business Economics (NABE) revealed that most of the surveyed economists believe a recession will begin by 2020 or 2021.
“Survey respondents indicate that the expansion will be extended by the shift in monetary policy, and most expect the next economic recession will occur later than anticipated when the February policy survey was conducted,” said NABE President and Chief Economist Constance Hunter.
The survey states that of the 98% who believe a recession will come after 2019, the panel is split between whether it will arrive in 2020 or 2021. The August 2019 NABE Economic Policy Survey is compiled with the responses of 226 members of the NABE.