Plain English with Derek Thompson Why Everybody Is Wrong About a Recession and Housing’s Great Comeback
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Feb 14, 2023 Conor Sen, a Bloomberg writer and housing market expert, challenges the recession narrative and discusses the surprising resilience of the U.S. economy. He outlines how unemployment is at historic lows and consumer spending remains strong. The conversation dives into the housing market's turnaround, highlighting key indicators of recovery and the impact of fluctuating mortgage rates. Sen also explores how a rebound in housing could redefine economic growth forecasts, providing fresh insights into the evolving landscape of homebuilding.
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Recession Myth
- Many believe the US is in a recession, citing factors like negative GDP growth and high recession odds.
- However, key indicators like unemployment, income growth, and consumer spending suggest otherwise.
Housing Market Shift
- The 2020-2021 housing market was extremely hot, but cooled rapidly in 2022 due to rising mortgage rates.
- Homeowners with low mortgage rates stayed put, creating a market standoff.
Mortgage Rate Impact
- A key factor in the housing rebound is the drop in mortgage rates from 7% to 6%.
- This, combined with slightly lower home prices and rising incomes, makes housing more appealing.