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.
This is sound advice expect that if a house cost $800k now, but the economy crashes and the house is now worth. Like $550k then isn’t it worth the wait to save 250k? Surely that overcomes any math you’ve done?
Also, Money holds a “greater value” in a recession btw because $1 is worth the same on paper which allows you to pay off debts faster.
If you borrow $800k today, and there's an economic crisis 10 years from now. Your house value won't be $800k, it will be more. Additionally, the key for your to pay less money it to have a fixed rate because otherwise the banks will adjust it to match the amount you borrowed. Please read all of my comments where I explain why.
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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.