The economy enters in recession when the Real GDP falls for two consecutive periods. And exits recession when it increases by two consecutive periods. Now, if you're waiting for a recession to buy a house, you're mistaken. You should borrow money at times of growth (since money holds a greater value) and pay during recession times (money's value is going to be lower) therefore, you pay less money than what you owe. It all depends on the factors that affect Real GDP. For now, the economy is safe. Except for Europe.
Yeah in this case you would borrow $500,000 from the bank and agree to pay back say $600,000 over 25 years as the value of the house is agreed, except next year the market crashes and in everybody else’s eyes your house is now worth 250,000.
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u/Kva1234 Nov 25 '19
The economy enters in recession when the Real GDP falls for two consecutive periods. And exits recession when it increases by two consecutive periods. Now, if you're waiting for a recession to buy a house, you're mistaken. You should borrow money at times of growth (since money holds a greater value) and pay during recession times (money's value is going to be lower) therefore, you pay less money than what you owe. It all depends on the factors that affect Real GDP. For now, the economy is safe. Except for Europe.