 TITLE: Is a Recession a Good Time to Buy a House? CONTENT: Benefits of Buying a House During a Recession\n---------------------------------------------\nFactors that make homebuying advantageous during a recession include:\n*   **Lower interest rates:** In response to reduced spending and slowing economic growth, the Federal Reserve historically exercises its power to lower its benchmark short-term interest rate to encourage investment and increase the availability of credit for individuals and companies. A lower Fed interest rate typically leads to a reduction in the prime interest rate banks charge when lending money to one another, which in turn leads to lower interest charges on commercial and private loans, including home mortgages. Lower mortgage rates mean a lower total cost over the life of a home purchase.\n*   **Less buying competition:** Economic downturns typically mean fewer people have the means to buy a first home or upgrade to a larger one. Depending on where you're shopping for a home and the type of house you desire, that may mean you'll have fewer rivals seeking the properties that interest you. A market with fewer buyers can mean less urgency to pounce on a desirable property immediately for fear another buyer will get it before you can submit an offer. It can give you more time to shop around and compare properties, and it may also reduce pressure to submit a bid that exceeds the asking price to make your offer stand out from those of rival buyers.\n*   **Lower home prices:** In accordance with the law of supply and demand, fewer buyers might cause a home seller to lower their price to make their property more appealing. Fewer buyers tends to mean longer selling cycles, which isn't ideal for those looking to sell in a hurry for financial reasons or because they have opportunity elsewhere. These sellers may lower their sales price or be willing to accept offers below their asking price if it allows them to avoid months of marketing, and open houses. END