Question

Why do economists assert that economic recessions are actually beneficial to many homebuyers?

A.
The government often gives away houses during recessions.
B.
Both home prices and mortgage interest rates tend to be lowest during recessions.
C.
Economists really do not understand the economy yet.
D.
Salaries of workers tend to rise during recessions.

Answer 1

The correct answer is:

Both home prices and mortgage interest rates tend to be lowest during recession

An economic recession is a period of time were economic activity slows down. Recessions generally occur when there is a drop in spending. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble. during this period home prices and mortgage interest rates are very low so this is benefitial for homebuyers.