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Waiting for a Recession to Buy a Home? This Realtor Weighs In

Here are the most important things to know about mortgage rates during an economic downturn.

The economy’s been all over the place lately. Inflation might be coming down, but rising tariffs, stock market dips and global uncertainty are keeping everyone on edge. With mortgage rates bouncing around, homebuyers are asking me, Will housing become more affordable in a recession?

After more than 20 years in real estate, I’ve seen my share of ups and downs, from boom times to full-blown crashes, like 2008. The truth? There’s always opportunity, even in a downturn. The market doesn’t stop during a recession. It just shifts. And if you’re ready, that shift can actually work in your favor.

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Let’s break down what a recession really means for mortgage rates, home prices and your opportunity to buy a home. 

Is a recession on its way?

There are plenty of recession warning signs right now. Layoffs are picking up, GDP is slowing and consumer confidence has dipped. Paychecks aren’t going as far, and retirement accounts are taking hits. 

While less disposable income and tighter budgets point to a general slowdown in the economy, technically, we’re not in a recession. Not yet. It would take two consecutive quarters of negative GDP growth to hit that definition. But for a lot of folks, it already feels like one. 

High prices and inflation aren’t the same thing. Even if the inflation rate isn’t going up, the cost of everyday goods and services is still high, and budgets are getting hammered. When folks feel the squeeze every time they swipe a card at the grocery store, it shapes how they think about making huge purchases like a home.

Will the Fed cut interest rates?

Borrowing costs have been expensive for the last several years, making households and businesses wary about taking out loans. The Federal Reserve will probably cut interest rates again later this year, eventually making financing cheaper. 

But those cuts won’t come for a while. The Fed’s a bit stuck right now. The economy’s losing steam and inflation is cooling, but not fast enough. The central bank is being cautious about shifting policy, especially with tariffs driving prices back up.

Though lower interest rates will eventually impact the housing market, the Fed doesn’t directly control mortgage rates. Mortgage rates move based on many factors, such as the bond market and investor expectations. Even when the Fed starts cutting rates again, don’t expect mortgage rates to drop like crazy. Many of those expected cuts are already priced into the market. 

Will mortgage rates drop in a recession?

Mortgage rates often fall during an economic depression, as we saw recently in 2020 and earlier in 2008. Lower rates help boost the economy, and the Fed knows that.

But this time around, things are messier. There’s volatility everywhere. Even though rates could drop, they might also shoot back up with any good economic news. Like many experts in the real estate industry, I think average rates for a 30-year fixed mortgage will hover between 6.5% to 7.25% for most of 2025, with weekly jumps and dips in that range. 

If you’re holding out for 4% or 5% mortgage rates, you may be waiting longer than you’d like. It’s going to take far more negative economic news to see rates fall in a big way.

It’s also worth pointing out that your personal financial situation matters more than your interest rate. If you’ve got a solid stream of income and a long-term plan for paying off a home loan, waiting for a perfect rate might not be worth it.

Will home prices go down in a recession?

Home prices are the big question. And the answer is… they won’t likely go down in a big way.

Historically, home prices don’t fall much during recessions. The 2008 housing crash was the exception, not the rule. What we’ll probably see is slower appreciation or small dips in certain markets, especially in areas hit by higher insurance costs, taxes or natural disasters (Florida, Texas and Louisiana come to mind).

But nationwide, we’re still dealing with low inventory. Until that changes, it’s hard to see prices dropping dramatically. Plus, given high construction and labor costs, it’s clear home prices aren’t falling off a cliff anytime soon.

Is it cheaper to buy a home during a recession?

If you’re financially stable, it could be cheaper to buy a home in a recession. You might find better deals, less competition and more negotiating power. But if lending tightens, getting a loan could get tougher. That’s something we’re already starting to see with condos and certain types of properties.

And don’t overlook the «wealth effect.» When people feel wealthier, like when their stock portfolio or home value is up, they’re more confident making big purchases. 

But when those numbers start to slide, or there’s even a threat of job insecurity, even if nothing’s really changed day to day, people pull back. That affects buyer activity in a big way. If someone just lost $20,000 in their 401(k), they’re not rushing to get a new mortgage.

What’s the best time to buy a home? 

The best time to buy a home is when it makes sense for you. If you’ve got a steady income and strong credit, and you’re ready to settle down, a recession could actually work in your favor. 

Just don’t wait around for some magical «perfect time» to take out a mortgage. The green light most people are waiting for doesn’t exist. But if you prepare, stay informed and work with the right team, you can make a smart move no matter what the economy’s doing.

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Google Making AI-Powered Glasses With Warby Parker, Gentle Monster

Google revealed its first two partnerships with eyeglass brands, with more to come.

The tech world has rarely been called stylish. But at Google’s annual I/O developers conference on Tuesday, the company took one step into the fashion world — kind of. The company revealed that the first eyeglass brands to carry Android XR AI-powered glasses will be Warby Parker and Gentle Monster, with more brand partners to be revealed in the future. Android XR is Google’s upcoming platform for VR, AR and AI on glasses and headsets.

Yes, there was a Superman joke as the company joked that unlike Clark Kent, who hid his superpowers behind nerdy glasses, the Android XR glasses will give you superpowers. That remains to be seen, although NBA star Giannis Antetokounmpo did show up at Google I/O wearing the XR glasses.

Warby Parker, founded in 2010, was originally an online eyeglass retailer that gained fame for its home try-on program, where customers could order five frames sent to their home to try on and then return. It also allowed customers to upload photos to see how they would look wearing different frames.

South Korean eyeglass brand Gentle Monster, founded in 2011, is known for its luxury eyeglasses and sunglasses. The company’s celebrity customers include Beyoncé, Rihanna, Kendrick Lamar and Billie Eilish.

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Tariffs Explained: I Have Everything You Need to Know as Walmart, Subaru Hike Prices

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Google I/O Announcements: The Latest AI Upgrades Coming to Gemini, XR and More

From its new Project Aura XR glasses to Chrome’s wants-to-be-more-helpful AI mode, Gemini Live and new Flow generative video tool, Google puts AI everywhere.

As you’d expect, this year’s Google I/O developer’s conference focused almost exclusively on AI — where the company’s Gemini AI platform stands, where it’s going and how much it’s going to cost you now for its new AI Ultra subscription plan (spoiler: $250 per month). Meanwhile, a new Flow app expands the company’s video-generation toolset, and its Android XR glasses make their debut. 

Plus, all AI usage and performance numbers are up! (Given that a new 42.5-exaflop Ironwood Tensor processing unit is coming to Google Cloud later this year, they’ll continue to rise.) 

Google’s Project Aura, a developer kit for Android XR that includes new AR glasses from Xreal, is the company’s next step in the company’s roadmap toward glasses-based, AI-driven extended reality. CNET’s Scott Stein goes in-depth in an exclusive interview with Shahram Izadi, Google’s VP and GM for Android XR about that future. And headset-based Project Moohan, developed in conjunction with Samsung, is now available, and Google’s working with Samsung to extend beyond headsets. 

For a play-by-play of the event, you can read the archive of our live blog.

Google already held a separate event for Android, where it launched Android 16, debuting its new Material 3 Expressive interface, updates to security and an update on Gemini integration and features. 

A lot of the whizzy new AI features are only available via one of its subscription levels. AI Pro is just a rebranding of Google’s $20-per-month Gemini Advanced plan (adding some new features), but Google AI Ultra is a pricier new option — $250 per month, with half off the first three months for the moment — that provides access to the latest, spiffiest and least usage-limited of all its tools and models,  as well as a prototype for managing AI agents and the 30 terabytes of storage you’re going to need to store it all. They’re both available today.

Google also wants to make your automation sound smarter with Personalized Smart Replies, which makes your generated answers sound more like you, as well as plowing through pieces of information on your device to provide relevant information. It’ll be in Gmail this summer for subscribers. Eventually, it’ll be everywhere. 

Also, it includes lots of better models, better coding tools and other details on developer-friendly things you expect from a developer conference. The announcement included its conversational Gemini Live, formerly part of Project Astra, its interactive, agentic, voice AI, kitchen sink AI app. (As Managing Editor Patrick Holland says, «Astra is a rehearsal of features that, when they’re ready for the spotlight, get added to Gemini Live.») And for researchers, NotebookLM incorporates Gemini Live to improve its… everything.

It’s available now in the US. 

Chrome AI Mode

People (that is, those over 18) who pony up for the subscriptions, plus users on the Chrome Beta, Dev and Canary tracks, will be able to try out the company’s expanded Gemini integration with Chrome — summary, research and agentic chat based on the contents of your screen, somewhat like Gemini Live does for phones (which, by the way, is available for free on Android and iOS as of today). But the Chrome version is more suited to the type of things you do at a computer rather than a phone. (Microsoft already does this with Copilot in its own Edge browser.)

Eventually, Google plans for Gemini in Chrome to be capable of synthesizing using multiple tabs and voice navigation. 

The company is also expanding how you can interact with its AI Overviews in Google Search as part of AI Mode, with interactions with AI Overviews and more agentic shopping help. It’s a new tab with search, or on the search bar, and it’s available now. It includes deeper searches, Personal Context — which uses all the information it knows about you, and that’s a lot — to make suggestions and customize replies.

The company detailed its new AI Mode for shopping, which has an improved conversational shopping experience, a checkout that monitors for the best pricing, and an updated «try on» interface that lets you upload a photo of yourself rather than modeling it on a generic body. 

Google plans to launch it soon, though the updated «try on» feature is now available in the US via Search Labs.

Google Beam

Formerly known as Project Starline, Google Beam is the updated version of the company’s 3D videoconferencing, now with AI. It uses a six-camera array to capture all angles of you, which the AI then stitches together, uses head tracking to follow your movements, and sends at up to 60 frames per second.

The platform uses a light field display that doesn’t require wearing any special equipment, but that technology also tends to be sensitive to off-angle viewing. HP is an old hand in the large-scale scanning biz, including 3D scanning, so the partnership with Google isn’t a big surprise. 

Flow and other generative creative tools

Google Flow is a new tool that builds on Imagen 4 and Veo 3 to perform tasks like creating AI video clips and stitching them into longer sequences, or extending them, with a single prompt while keeping them consistent from scene to scene. It also provides editing tools like camera controls. It’s available as part of Gemini AI Ultra. 

Imagen 4 image generation is more detailed, with improved tonality and better text and typography. And it’s faster. Meanwhile, Veo 3, also available today, has a better understanding of physics and native audio generation — sound effects, background sounds and dialogue.

Of course, all this is available under the AI Pro plan. Google’s Synth ID gen AI detection tool is also available today.

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