Why a Recession Doesn’t Always Mean a Real Estate Downturn

With increased talk about a possible recession this year, many homebuyers and sellers in Williamsburg, Virginia are wondering what it could mean for the local housing market. Would prices fall? Will mortgage rates rise again? Before jumping to conclusions, let’s take a look at the historical data—and what it suggests for today.

A Recession Doesn’t Automatically Equal Falling Home Prices

One of the biggest misconceptions is that a recession will automatically bring home prices crashing down. But history tells a different story.

According to data from CoreLogic, in four of the last six U.S. recessions, home prices actually went up. The one major exception? The 2008 housing crash—which was caused by a mortgage crisis and over-inflated values, not the recession itself.

So, what does that mean for Williamsburg home values today? While every market is different, current conditions don't resemble the housing landscape of 2008. Local prices have remained steady, and homes in Williamsburg continue to appreciate at a more sustainable pace, especially in desirable areas with strong schools, community amenities, and proximity to Colonial Williamsburg and the College of William & Mary.

Mortgage Rates Tend To Drop During Recessions

Another trend to watch? Mortgage rates typically decline during economic slowdowns. Data from Freddie Mac shows that rates have fallen in every recession since 1980—helping to offset affordability challenges.

For buyers in Williamsburg, lower mortgage rates could increase purchasing power and bring monthly payments within reach—especially when looking at popular single-family homes or maintenance-free condos across neighborhoods like Kingsmill, Governors Land, or Fords Colony.

While no one can promise a return to pandemic-era interest rates, even a modest decline could make a noticeable difference in affordability.

What It All Means for You

Whether you're buying your first home in Williamsburg or planning to downsize ahead of retirement, the potential for a recession doesn’t mean you need to hit pause. With home prices holding steady and mortgage rates likely to trend lower in a downturn, market conditions may actually become more favorable.

The key is having the right local guidance and a strategy tailored to your goals.

Bottom Line

If a recession does happen, it doesn’t mean the Williamsburg housing market will suffer. History shows that home prices often remain stable—or even rise—and mortgage rates tend to drop. Whether you're planning to buy or sell this year, let’s talk about how to make a move with confidence.