From the course: Economics for Everyone: Housing Markets in Crisis

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Housing in a recession

Housing in a recession

From the course: Economics for Everyone: Housing Markets in Crisis

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Housing in a recession

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- Not every recession results in a housing crisis and not every crisis causes a recession. So what's the correlation and the relationship between recessions and housing crises? Let's take a look at two different recessions in the not too distant past to give us an idea of how different things can be. In the 2001 recession, one of the mildest recessions in history, that recession was caused by the bursting of a tech bubble in equity markets. Did it result in a housing crisis? Not at all. In fact, by several different measures, housing actually strengthened during the 2001 recession. This example is in stark contrast to the great recession from 2007 to 2009. That recession was explicitly caused by a housing crisis, and by almost every metric housing took a massive hit, both in terms of sales, in terms of new starts and in terms of prices. Let's take a look at some of the data to see exactly how different these two…

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