Motivations for investors and people shopping for a personal home are quite different.
Here are some reasons why someone might consider buying a house during an economic recession and when interest rates are relatively high:
Lower prices
Economic recessions often lead to a slowdown in the housing market, which can result in lower home prices. This can be a great opportunity for buyers to snag a deal on a home that they might not have been able to afford during more prosperous times. How far into a dip is the market and will it dip more? We think we're pretty good at making informed decisions but even professional investors rarely guess the absolute top or bottom of a market, so there's always a art left to chance.
Affordability
While interest rates may be relatively high during an economic recession, they may still be lower than they were in the past or may be expected to rise in the future. Buying a home when interest rates are high but expected to rise can be a good way to lock in a lower mortgage rate and make homeownership more affordable.
Investment opportunity
While the housing market may be sluggish during an economic recession, it is likely to bounce back eventually. Buying a home during a recession can be a good opportunity to get in at a lower price and potentially see appreciation in the value of the home when the market recovers.
Forced savings
Owning a home requires ongoing maintenance and upkeep, which can be a good way to save money and build equity over time. During an economic recession, people may be forced to cut back on discretionary spending, and owning a home can be a way to prioritize saving and building wealth.
Stable housing
Renting a home can be uncertain, as landlords may decide to sell or raise the rent. Owning a home provides a sense of stability and the ability to have control over where you live. During an economic recession, this sense of stability can be especially appealing.
It's important to note that buying a home is a major financial decision and should not be taken lightly. It's important to carefully consider your financial situation and do thorough research before making a decision.
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