Depending on what news bulletin you're listening to or which economist is talking, the U.S. – and probably the rest of the world – is on the brink of recession at just about any moment. Time and time again, however, the economy has remained steady over the last few years.
Of course, what goes up must come down, and lingering memories make many homeowners concerned.
The Great Recession technically began in December 2007 and ended in June 2009, but many Americans are still still dealing with the effects – particularly from the housing market crash – years later.
Some homeowners still haven’t fully recovered, with roughly 5.2 million homeowners owing more on their home than it’s worth at the end of the first quarter of 2019, according to real estate information company ATTOM Data Solutions. While that number, representing 9.1% of all mortgaged properties in the U.S., is a slight increase from the end of 2018, when 8.8% of mortgaged homes were seriously underwater, it’s still far lower than anything seen in the aftermath of the recession. Negative equity hit its peak in 2012, when nearly 30% of homeowners were underwater on their mortgages.
On a national scale, real estate has come a long way since those dark days, and home values continue to rise in most major markets and are expected to increase a total of nearly 4.1% nationally in 2019, according to real estate information company Zillow. Low inventory of available homes on the market and a high volume of buyers contribute to the price increases.
But since the economy is now largely flourishing and has been for a few years, people naturally wonder when it will begin to slow and are nervous about how badly they’ll be affected when the next downturn hits.
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.
“It was called the Great Recession for a reason,” says Skylar Olsen, director of economic research for Zillow. “That was a really big one in the course of recent history – that was an exceptional recession. … It would really ease fears to just remind people, ‘Hey, there were other recessions first that were much milder.’”
Buyers and sellers don't have to wait till 2018 to be part of a home sale.
Here are three things to know about how the housing market could fare in the next recession, plus what you can do to prepare yourself.
Housing Won’t Be the Problem
According to the 2019 Zillow Home Price Expectations Survey released June 5, 50% of the surveyed economists, investment strategists and housing market analysts believe the next recession will begin in 2020, with 19% predicting it will begin in the third quarter.
Experts surveyed point to trade policy as the most likely cause of the next recession, followed by a stock market correction and geopolitical crisis – all of which would be a far cry from the lax lending policies and financial liquidity issues that contributed to the Great Recession.
“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,” says Mark Fleming, chief economist for title insurance company First American Financial Corporation.
As Fleming notes, the housing market has traditionally aided the economy in recovering from a recession, as consumers who are less effected by the downturn are willing to buy and sell, and existing homeowners are able to take advantage of equity in their properties.
In the midst of a recession where subprime mortgages are not a significant factor – as experts predict they wouldn’t be in the next downturn – it’s reasonable to expect homeowners to stay where they are while things are uncertain and wait to move when they feel more confident, which can help get other parts of the economy moving.
Olsen says job loss and uncertainty can still lead to a drop in housing demand, although in a future recession it’s more likely to be short-lived. “We still expect that to be a part of the story, … but much milder,” she says.
Always Expect Housing Markets to Ebb and Flow
While housing isn’t expected to be problematic on a national level in the next recession, some markets will likely take bigger hits than others.
Even outside of a large-scale recession, individual housing markets and geographic regions often see peaks and plateaus, rising with demand and then experiencing a downturn once prices go beyond what homebuyers are willing to pay.
Already, many markets across the U.S. have seen a slowing demand among buyers. Olsen notes that this price correction makes up for recent years when housing inventory was so low it caused rapid home value increases. Rather than serving as a precursor to recession, these housing markets are preparing, in a way, for a period when the economy tightens.
“Housing will be even better positioned to make it through the next recession without significant home loss,” Olsen says.
But even if home values experience a dip on a national scale due to a slowing economy, a slight drop wouldn’t instantly lead to foreclosures. Fleming notes that the housing crisis in the Great Recession was fueled heavily by the fact that job loss was paired with a significant share of homeowners who didn’t have much equity in their homes. On the whole, homeowners aren’t making the same mistakes, and they have much more equity in their homes if prices drop.
“Homeowners, collectively, have a pretty big cushion today to withstand some price decline,” Fleming says.
Homeowners Shouldn’t Worry – if They Can Make Payments
In addition to the equity homeowners have, Fleming notes that the vast majority are also locked into 30-year fixed-rate mortgages, most likely having refinanced during the recent period of historically low interest rates.
With a low interest rate and affordable monthly payments, Fleming says most homeowners are in a good place if the economy slows. If you haven’t refinanced yet, there’s still time to do so. The Federal Reserve announced in March that it plans to keep the federal funds rate at 2.5% for the remainder of 2019.
The Fed’s decision not to increase the rate, combined with a less competitive housing market overall, has helped keep mortgage rates low in recent months. Freddie Mac reported at the end of May that the average 30-year, fixed-rate mortgage interest rate fell to 3.99% at the end of May, which is the first time it has below 4% since January 2018. For many homeowners looking to shave a bit off their monthly payments with an economic downturn in mind, now would be a good time.
“If you can knock down you mortgage payment a couple hundred dollars a month, maybe that gives you a little more breathing room in the event of the recession,” Fleming says.
[Read: How to Buy a Foreclosed Home]
Even for those homeowners still underwater from the last recession, Fleming says as long as they’re making monthly mortgage payments, they don’t need to worry.
“The challenge is when you’re underwater on that mortgage, and then for some reason you lose the ability to make that mortgage payment,” Fleming says.
To combat that, Fleming recommends following this age-old personal finance advice: Make sure you have six months of living expenses saved up in case you fall victim to layoffs.
These places have the highest net migration over five years.
When calculating the Best Places to Live, U.S. News factors in each metro area’s growth due to net migration over a five-year period. For the 2019 rankings, we used net migration data from 2013 to 2017 from the U.S. Census Bureau, the most recent complete data set at the time of our calculations. Places with the most growth might be attracting new residents for many reasons, including a hot job market, affordable housing, a desirable location or some other factor. Read on for the 25 metro areas – out of the 125 most populous in the U.S. – that have grown the most over this period.25. Seattle
Best Places 2019 Rank: 9
Metro Population: 3,735,216
Median Home Price: $442,333
Median Annual Salary: $63,120
Net Migration, 2013 to 2017: 5.58%
Seattle has long had a reputation for its strong job market, with the likes of Microsoft, Starbucks and Amazon headquartered in the area. Also receiving a high score for desirability in the Best Places to Live ranking, Seattle isn’t just bringing people to the area for work – they also want it to be their next hometown.
Learn more about Seattle.24. Denver
Best Places 2019 Rank: 2
Metro Population: 2,798,684
Median Home Price: $393,842
Median Annual Salary: $57,400
Net Migration, 2013 to 2017: 5.67%
Growing 5.67% due to net migration between 2013 and 2017, Denver's population continues to swell at a rapid, although slowing, pace. This population boom is due to both its flourishing job market and high desirability among U.S. residents.
Learn more about Denver.23. Dallas-Fort Worth
23. Dallas-Fort Worth
Best Places 2019 Rank: 21
Metro Population: 7,104,415
Median Home Price: $248,375
Median Annual Salary: $51,250
Net Migration, 2013 to 2017: 5.7%
The largest metro area on this list, Dallas-Fort Worth grew by 5.7% in a five-year period. The area’s continued growth has contributed to rising home prices, as the median home price is now $248,375, compared to just $210,181 in 2018.
Learn more about Dallas-Fort Worth.22. Houston
Best Places 2019 Rank: 30
Metro Population: 6,636,208
Median Home Price: $223,875
Median Annual Salary: $53,820
Net Migration, 2013 to 2017: 5.91%
Houston takes the No. 22 spot on the list, having grown by 5.91% from 2013 to 2017 due to net migration. The large Texas metro area’s growth has slowed compared to the span from 2012 to 2016, when it grew by 6.58%.
Learn more about Houston.21. Asheville, North Carolina
21. Asheville, North Carolina
Best Places 2019 Rank: 16
Metro Population: 445,625
Median Home Price: $248,500
Median Annual Salary: $41,210
Net Migration, 2013 to 2017: 6.16%
A smaller metro area than most places on the list, Asheville earns its spot at No. 21 after growing 6.16% between 2013 and 2017 due to net migration alone.
Learn more about Asheville.20. Phoenix
Best Places 2019 Rank: 26
Metro Population: 4,561,038
Median Home Price: $234,183
Median Annual Salary: $49,500
Net Migration, 2013 to 2017: 6.3%
Phoenix serves as a particularly hot destination for retirees. But the job market and ample outdoor activities continue to attract new residents of all ages. The area has grown by 6.3% over a five-year period.
Learn more about Phoenix.19. San Antonio
19. San Antonio
Best Places 2019 Rank: 34
Metro Population: 2,377,507
Median Home Price: $211,800
Median Annual Salary: $46,200
Net Migration, 2013 to 2017: 6.6%
The third of four Texas metro areas on the list, San Antonio has experienced significant growth due to net migration: 6.6% between 2013 and 2017.
Learn more about San Antonio.18. Raleigh and Durham, North Carolina
18. Raleigh and Durham, North Carolina
Best Places 2019 Rank: 10
Metro Population: 1,824,266
Median Home Price: $249,294
Median Annual Salary: $53,788
Net Migration, 2013 to 2017: 6.76%
Home to major universities – the University of North Carolina—Chapel Hill, Duke University and North Carolina State University – the Raleigh and Durham metro area has plenty of former students who are choosing to lay down permanent roots, while others are flocking there for the job opportunities the schools and other locally based corporations offer.
Learn more about Raleigh and Durham.16. Jacksonville, Florida (tie)
16. Jacksonville, Florida (tie)
Best Places 2019 Rank: 42
Metro Population: 1,447,884
Median Home Price: $174,658
Median Annual Salary: $45,760
Net Migration, 2013 to 2017: 6.88%
Sunny Florida weather, a below-average cost of living and a growing business district continue to attract residents of all ages to Jacksonville, which grew by 6.88% due to net migration between 2013 and 2017.
Learn more about Jacksonville.16. Nashville, Tennessee (tie)
16. Nashville, Tennessee (tie)
Best Places 2019 Rank: 15
Metro Population: 1,830,410
Median Home Price: $248,883
Median Annual Salary: $47,110
Net Migration, 2013 to 2017: 6.88%
With growth numbers like this, aspiring country singers certainly aren’t the only ones moving to Nashville. The largest metro area in Tennessee comes in at No. 16, having grown by 6.88% due to net migration between 2013 and 2017.
Learn more about Nashville.15. Fayetteville, Arkansas
15. Fayetteville, Arkansas
Best Places 2019 Rank: 4
Metro Population: 514,166
Median Home Price: $177,942
Median Annual Salary: $45,830
Net Migration, 2013 to 2017: 6.94%
Northwest Arkansas’ largest metro area continues to grow rapidly, by 6.94% over a five-year period due to net migration. Fayetteville’s growth is picking up speed as well. In last year’s ranking, Fayetteville saw just 6.44% growth due to net migration from 2012 to 2016.
Learn more about Fayetteville.14. Charlotte, North Carolina
14. Charlotte, North Carolina
Best Places 2019 Rank: 20
Metro Population: 2,427,024
Median Home Price: $213,983
Median Annual Salary: $50,150
Net Migration, 2013 to 2017: 7.06%
Growing by more than 7% between 2013 and 2017 from people relocating to the area, Charlotte attracts many newcomers due to its role in the banking industry, as it’s home to Bank of America and major offices for Wells Fargo.
Learn more about Charlotte.13. Las Vegas
13. Las Vegas
Best Places 2019 Rank: 71
Metro Population: 2,112,436
Median Home Price: $271,767
Median Annual Salary: $44,450
Net Migration, 2013 to 2017: 7.33%
One of the recession’s hardest-hit cities, particularly in the housing market, Las Vegas continues its upward trend with a growing job market and plenty of entertainment options to attract new residents.
Learn more about Las Vegas.12. Boise, Idaho
12. Boise, Idaho
Best Places 2019 Rank: 17
Metro Population: 677,346
Median Home Price: $221,475
Median Annual Salary: $43,880
Net Migration, 2013 to 2017: 7.77%
Offering a more laid-back vibe than Las Vegas, Boise comes in at No. 12. Idaho’s capital grew by 7.77% between 2013 and 2017 due to net migration alone.
Learn more about Boise.11. Tampa, Florida
11. Tampa, Florida
Best Places 2019 Rank: 56
Metro Population: 2,978,209
Median Home Price: $199,717
Median Annual Salary: $46,080
Net Migration, 2013 to 2017: 7.93%
The second of nine Florida metro areas on the list, this Gulf Coast metro area grew by 7.93% between 2013 and 2017 due to net migration.
Learn more about Tampa.10. Charleston, South Carolina
10. Charleston, South Carolina
Best Places 2019 Rank: 45
Metro Population: 744,195
Median Home Price: $246,408
Median Annual Salary: $44,970
Net Migration, 2013 to 2017: 7.97%
People love visiting Charleston, which is helping the South Carolina city’s tourism industry boom. But plenty of visitors are clearly choosing to stay, as the Charleston metro area grew by 7.97% due to net migration over five years.
Learn more about Charleston.9. Melbourne, Florida
9. Melbourne, Florida
Best Places 2019 Rank: 25
Metro Population: 568,183
Median Home Price: $198,425
Median Annual Salary: $48,240
Net Migration, 2013 to 2017: 8.74%
Growing 8.74% due to net migration between 2013 and 2017, Melbourne sees particular interest from seniors. The metro area’s median age is 47.1 years old, compared to the national median age of 38.1, according to the U.S. Census Bureau.
Learn more about Melbourne.8. Orlando, Florida
8. Orlando, Florida
Best Places 2019 Rank: 63
Metro Population: 2,390,859
Median Home Price: $233,050
Median Annual Salary: $44,410
Net Migration, 2013 to 2017: 9.28%
The home of Disney World and Universal Studios doesn’t just attract tourists hoping to see their favorite fictional characters up close. It also brings people who are planning to make this warm-weather destination their home.
Learn more about Orlando.7. Lakeland, Florida
7. Lakeland, Florida
Best Places 2019 Rank: 59
Metro Population: 652,256
Median Home Price: $171,967
Median Annual Salary: $40,560
Net Migration, 2013 to 2017: 9.91%
Located in the center of Florida’s peninsula, Lakeland is showing strong growth that mirrors the state’s coastal metro areas featured on the list. Lakeland grew by 9.91% from 2013 to 2017 due to net migration alone.
Learn more about Lakeland.6. Austin, Texas
6. Austin, Texas
Best Places 2019 Rank: 1
Metro Population: 2,000,590
Median Home Price: $292,500
Median Annual Salary: $51,840
Net Migration, 2013 to 2017: 10.09%
Following the Great Recession, an increasing number of tech companies have been opening offices in this Texas metro area. Its affordability relative to the likes of spendy California metro areas such as San Jose and San Francisco is driving many people to Austin for work. It’s a hot enough destination that the metro area grew by 10.09% over five years due to net migration.
Learn more about Austin.5. Port St. Lucie, Florida
5. Port St. Lucie, Florida
Best Places 2019 Rank: 78
Metro Population: 454,482
Median Home Price: $211,083
Median Annual Salary: $42,500
Net Migration, 2013 to 2017: 10.24%
Located along the Treasure Coast, Port St. Lucie attracts people looking for a place with plenty of waterways to explore and, of course, the warm Florida weather. The Port St. Lucie area grew by 10.24% during a five-year period.
Learn more about Port St. Lucie.4. Daytona Beach, Florida
4. Daytona Beach, Florida
Best Places 2019 Rank: 99
Metro Population: 623,675
Median Home Price: $192,817
Median Annual Salary: $38,710
Net Migration, 2013 to 2017: 10.35%
Daytona Beach’s growth from net migration between 2013 and 2017 nearly hit 10.5%. The coastal metro area attracts plenty of tourists to NASCAR races and local beaches, but many of these visitors also appear happy enough to make the place their next hometown.
Learn more about Daytona Beach.3. Sarasota, Florida
3. Sarasota, Florida
Best Places 2019 Rank: 18
Metro Population: 768,381
Median Home Price: $237,260
Median Annual Salary: $42,680
Net Migration, 2013 to 2017: 13.1%
With a median age of more than 51 years, Sarasota is a particularly attractive destination for retirees, even more so than other Florida locales. Sarasota grew by a whopping 13.1% in a five-year period due to net migration.
Learn more about Sarasota.2. Fort Myers, Florida
2. Fort Myers, Florida
Best Places 2019 Rank: 35
Metro Population: 700,165
Median Home Price: $219,200
Median Annual Salary: $41,380
Net Migration, 2013 to 2017: 14.42%
Fort Myers ranks No. 2 on the Best Places People Are Moving list for the second straight year. Fort Myers grew by 14.42% over a five-year period due to net migration.
Learn more about Fort Myers.1. Myrtle Beach, South Carolina
1. Myrtle Beach, South Carolina
Best Places 2019 Rank: 75
Metro Population: 432,772
Median Home Price: $181,800
Median Annual Salary: $35,890
Net Migration, 2013 to 2017: 17.41%
Myrtle Beach may be small, but it’s proving popular among people looking for a new place to live. Like many of the Florida metro areas on the list, this coastal South Carolina spot attracts plenty of retirees looking for warm weather year-round, lending to the metro’s median age of 46.5 years.
Learn more about Myrtle Beach.The best places to live in the U.S. based on net migration:
The best places to live in the U.S. based on net migration:
- Myrtle Beach, South Carolina
- Fort Myers, Florida
- Sarasota, Florida
- Daytona Beach, Florida
- Port St. Lucie, Florida
- Austin, Texas
- Lakeland, FLorida
- Orlando, Florida
- Melbourne, Florida
- Charleston, South Carolina
Updated on June 5, 2019: This story was originally published on Sept. 11, 2017, and has been updated with new information
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at firstname.lastname@example.org.
May 11, 2020
U.S. News analyzed the 150 most populous metro areas to rank places to live by category.