Why the Economy Won't Affect the Real Estate Market in Charleston, SC

If you’re concerned about an impending economic downturn, you're not alone. In recent years, recession discussions have been prevalent, sparking fears of a potential spike in unemployment and a surge in foreclosures reminiscent of the events 15 years ago.

Yet, according to the latest Economic Forecasting Survey from the Wall Street Journal (WSJ), optimism is prevailing. For the first time in over a year, less than half (48%) of economists anticipate a recession within the next year. The WSJ notes, "Economists are turning optimistic on the U.S. economy," marking a shift from a 54% probability in July to a more positive 48%.

With over half of the experts no longer expecting a recession, the natural assumption is that they also foresee a stable unemployment rate. The data from the WSJ survey indeed supports this, projecting a steady unemployment rate over the next three years.

However, the crucial question remains: could potential job losses lead to a housing market crash? Examining historical data from Macrotrends and the Bureau of Labor Statistics (BLS), the answer seems to be no. Presently, the unemployment rate is at historical lows, a fact highlighted in the next graph.

Comparing historical averages, the orange bar in the graph indicates a 5.7% average unemployment rate dating back to 1948. Contrastingly, during the 2008 financial crisis, the average rate soared to 8.3%, causing a housing market crash. Both these figures significantly surpass today's unemployment rate, showcased in the blue bar.

Projections indicate that the unemployment rate will likely remain below the 75-year average, signaling a lack of an impending wave of foreclosures that could severely impact the housing market.

In conclusion, most economists are no longer anticipating a recession in the next 12 months. Consequently, the expectation is for a stable unemployment rate, negating the likelihood of a surge in foreclosures and another housing market crash. For more insights on unemployment and its potential impact on the housing market, connect with the local real estate experts at AgentOwned Realty.