If you're concerned about a recession happening soon, you're definitely not the only one. Lately, there's been a ton of talk about the possibility of a recession. And a lot of folks are worried that if it does happen, it could result in a crazy high unemployment rate. There are even some people out there who are afraid that the spike in unemployment could cause a wave of foreclosures like we saw 15 years ago. Scary stuff, huh?

Guess what? According to the latest Economic Forecasting Survey from the Wall Street Journal (WSJ), less than half of economists (only 48%) think we're gonna have a recession in the next year. Can you believe it? This is the first time in over a year that the majority of economists are actually feeling pretty optimistic.

““Economists are turning optimistic on the U.S. economy . . . economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.””

— Economic Forecasting Survey from the Wall Street Journal (WSJ)

Well, here's the thing. If more than half of the experts are saying that there won't be a recession in the coming year, then it's safe to say that they also don't expect a big increase in the unemployment rate. So, I have this graph that I want to show you. It's based on the data from a survey conducted by the Wall Street Journal, and it reveals what these economists are predicting for the unemployment rate over the next three years. Take a look at it below.

If the experts are right, it looks like more people are going to be out of work next year. And losing a job is terrible for both the person who gets let go and their family. It's just really tough on everyone involved.

The real question is: do you think there will be so many people losing their jobs that it will lead to a lot of homes being foreclosed and the housing market crashing? Well, if we look back at the past and check out some data from Macrotrends and the Bureau of Labor Statistics (BLS), it seems like that won't be the case. See, the unemployment rate is actually super low right now, almost at its lowest point ever. So, things are looking pretty good for the housing market!

So let's talk about this graph, alright? The orange bar represents the average unemployment rate from way back in 1948 and it's at 5.7%. Now, check out the red bar, which shows what happened during the 2008 financial crisis when the housing market crashed. The average unemployment rate at that time shot up to 8.3%. Yikes, that's quite a jump, right? But here's the good news - the blue bar representing today's unemployment rate is much lower than both of those previous times. Phew! That's something to be relieved about.

So here's the deal: moving forward, it looks like the unemployment rate will probably stay below the average of the past 75 years. That's good news for the housing market because it means we won't be hit with a bunch of foreclosures that could really mess things up.

Bottom Line

Good news on the economic front - most economists are pretty optimistic these days and don't think we're headed for a recession in the next year. And because of that, they're not predicting a big increase in unemployment, which means we shouldn't see a bunch of people losing their homes and another housing market crash. If you've got any questions about how unemployment affects the housing market, feel free to reach out and we can chat!