LAS VEGAS (KTNV) — A roof over your head is a necessity, but just like pretty much everything else in the U.S. right now, inflation is making the housing market more unpredictable and harder to navigate.
Though a recession hasn't officially been announced, the U.S. GDP is down for the second quarter in a row. Many professions are now pivoting in an effort to curb the fallout of what some say is already here.
Veteran Las Vegas realtors Jennifer Graff and David Lee lived and worked through the Great Recession in 2008.
"The difference is a big difference," Lee said. "Back then, the loans were horrible loans, they gave them to anybody. This time with our downturn and possible recession, the loans are very strong, low interest rates, so it's a completely different vibe."
On Wednesday, the Federal Reserve announced another interest rate hike of 0.75% as part of its ongoing effort to curb inflation without causing a recession.
"The Fed is trying to essentially curb demand and curb demand in the housing market, and how they are doing that, they're raising interest rates," said Graff, "and by doing that they're slowing down sales and we can see it now in the marketplace."
On one side, there's new construction. On the other, completed homes waiting for buyers. But as recession looms over the U.S. and many are priced out of owning a home in the Las Vegas valley, buyer demand is going down.
While a recession has not been officially declared, economic expert Steve Budin says there's a reason for that.
"Using the term 'recession' is more psychological than it is financial," Budin said. "When people hear 'we are in a recession,' they are less likely to spend money. So what the government really is doing, is doing all it can to prevent from using that word."
A recession is defined by two negative quarters of growth, Budin says, "and in 2022, we have had that. So technically, yes, we are in a recession."
As long as consumers keep spending, we can buy some time, he added.
"If people don't spend, then that trickle-down effect, that recession, becomes self-fulfilled," Budin said.