The housing market is in a downturn. Does that mean the economy is too?

Back at the beginning of September, the average 30-year fixed-rate mortgage was at 6.7%.

Since then, the Federal Reserve has raised interest rates — and hinted that it will do so again — and inflation, geopolitical tensions, and high government borrowing costs haven’t gone anywhere. Mortgage rates responded accordingly — last week, the average 30-year fixed-rate hit 7.4%.

So, when the National Association of Realtors’ report on existing home sales for September comes out on Tuesday morning, experts expect another decline after August’s dismal report.

“Home prices are high and not coming down,” said Jeff Ostrowski, a housing market analyst at Bankrate. “People who own homes are staying put, and people who don’t own homes are putting off their decision to buy. There just are very few sales happening.”

Ostrowski and others are calling this a housing recession.

Usually, that kind of event has a lot of spillover effects to the broader economy. But not so much this time around, according to Daryl Fairweather, chief economist at Redfin — because the job market is strong and consumers are still spending, while AI and data center construction are booming.

“The housing market has essentially been frozen since 2023,” Fairweather said. “We know the economy can survive this level of home sales, because we’ve been surviving it.”

And this sluggish housing market isn’t bad for everyone, said Mischa Fisher, chief economist at Zillow Group. Buyers who can afford today’s prices and rates will do just fine.

“The good news is, because there is a silver lining here, inventory has continued to rise, so you’ve got more to choose from, and you’ve also got less competition from other buyers,” Fisher said. “To some degree, the best time to buy a house is when nobody else is looking.”

Fisher pointed out that there are still plenty of affordable markets, especially in the Midwest and South — in cities like Indianapolis, Cincinnati, Nashville, Dallas, Austin, and San Antonio.