“Experts largely expect the next recession to begin in 2020.”That timing concurs with a recent survey of economists by the Wall Street Journal: “The economic expansion that began in mid-2009 and already ranks as the second-longest in American history most likely will end in 2020 as the Federal Reserve raises interest rates to cool off an overheating economy, according to forecasters surveyed.”Here is a graph comparing the opinions of those surveyed by both the Wall Street Journal and Pulsenomics: Recession DOES NOT Equal Housing CrisisAccording to the Merriam-Webster Dictionary, a recession is defined as follows:“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”A recession means the economy has slowed down markedly. It does not mean we are experiencing another housing crisis. Obviously, the housing crash of 2008 caused the last recession. However, during the previous five recessions home values appreciated. According to the experts surveyed by Pulsenomics, the top three probable triggers for the next recession are:
Others agree that housing will not be impacted like it was a decade ago. Mark Fleming, First American’s Chief Economist, explained: “If a recession is to occur, it is unlikely to be caused by housing-related activity, and therefore the housing sector should be one of the leading sources to come out of the recession.”And U.S. News and World Report agreed: “Fortunately – and hopefully – the history of recessions and current issues that could harm the economy don’t lead many to believe the housing market crash will repeat itself in an upcoming decline.” Bottom LineA recession is probably less than two years away. A housing crisis is not. |
Monday, July 9, 2018
Next Recession in 2020? What Will Be the Impact?
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