Two cities in New York, along with a neighboring one in Connecticut, have the lowest risk of a housing downturn in the next recession, according to a report by Redfin.
“Home prices are high right now, but they’re high because there’s not enough supply to meet demand, which means there’s not a bubble at risk of bursting,” Redfin Chief Economist Daryl Fairweather said in a release. “Most of today’s financed homeowners have excellent credit and a cushion of home equity, making them unlikely to default on their mortgage even if their weekly grocery bill grows or their stock portfolio shrinks in the next recession.”
Fairweather said if the U.S. enters a recession in the next two years, it will likely be caused by the global trade war.
“U.S. industries that rely on exports, like the automotive industry and the agricultural industry, would be the most vulnerable and susceptible to layoffs,” Fairweather said. “Homeowners who are laid off may not be able to continue covering their monthly mortgage payment and may be forced to sell their homes.”
“And would-be homebuyers won’t feel so confident about making a big purchase when they don’t feel confident about their job security or their financial wellbeing,” she added. “That could cause declines in home prices in markets whose economy depends on global trade, but home prices nationwide are likely to hold steady.”
According to the report, the metro areas with the highest risk of a real estate dip during a recession are Riverside, Calif. (72.8 percent); Phoenix (69.8 percent); and Miami (69.5 percent).
Redfin said the metro areas with the lowest risk of a real estate dip during the next recession are Rochester, N.Y. (30.4 percent); Buffalo, N.Y. (31.9 percent); and Hartford, Conn. (33.9 percent).