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However, this downturn in the housing market is often temporary. Historically, housing has also been among the earliest indicators of economic recovery. Once recessionary pressures ease, the housing market tends to bounce back swiftly, often serving as a vital catalyst for broader economic revitalization.
The Role of Mortgage Rates in Housing Rebounds
One of the key drivers influencing housing market dynamics during and after recessions is mortgage rates. When the economy enters a recession, the Federal Reserve and other monetary authorities typically respond by lowering interest rates to stimulate growth. These cuts are closely reflected in mortgage rates, which generally decline during economic downturns.