You're not alone if you're concerned about an impending recession. Recession rhetoric has been all the rage over the last few years. And a lot of people are concerned that if we do have one, the unemployment rate would soar. Some others are even worried that a rise in unemployment will trigger a wave of foreclosures akin to what occurred fifteen years ago.
But according to the Wall Street Journal's (WSJ) most recent Economic Forecasting Survey, less than half (48%) of experts genuinely think a recession would happen within the next year, which is a change from the previous year.
You may assume that experts who predict a recession within the next year also predict that the unemployment rate won't rise sharply, and you would be correct. However, more than half of them do not.
More employment will be lost in the following year if those expert predictions come true. And for those folks and their loved ones, losing a job of any kind is terrible.
But the real question here is, will enough jobs be lost to trigger a foreclosure tsunami that would bring down the housing market? The Bureau of Labor Statistics (BLS) and Macrotrends' historical background indicate that the answer is no.
The current unemployment rate (shown by the blue bar) is substantially lower than both of those levels.
Forecasts indicate that the unemployment rate will probably continue to be lower than the 75-year average in the future. Thus, a wave of foreclosures that would have a negative effect on the housing market won't occur.
In summary
The majority of economists now do not predict a recession in the upcoming year. They therefore do not anticipate a sharp increase in the unemployment rate, which would trigger a wave of foreclosures and another property market meltdown. Speak with a real estate expert if you have any questions about unemployment and how it affects the home market.
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