What Happens During a Recession and Housing

Not all recessions lead to falling home prices.

The 2008 financial crisis was unique because it was directly caused by the housing and lending system. Most other recessions do not share those conditions.

In many downturns, mortgage rates actually fall as the Federal Reserve reduces interest rates to stimulate the economy, which can support housing affordability.

Fannie Mae’s 2026 outlook continues to show modest price growth or stability in most economic scenarios, largely due to ongoing supply constraints.

Housing performance during recessions depends more on supply, credit conditions, and job losses than on the recession itself.

Each recession is different, and housing reacts differently depending on its cause.