Recession usually means bad things for homeowners. Real estate quickly lost value, and many homeowners found themselves owing far more than they are worth on their homes, which is called underwater for mortgages. What if they need to sell due to layoffs or other recession-related issues? This could mean paying financial losses and owing your lender funds even after the sale.

Unfortunately, the recession may be coming soon. JPMorgan researchers estimate the chances of a recession in 2025 at about 60%, while the International Monetary Fund estimates a 40% chance in the economic outlook for April.

“However, a recession doesn’t have to be caught off guard,” said Matthew Argyle, a certified financial planner for Encore’s retirement plans. "With the right preparation, your home may be more than just a roof overhead - it can be a buffer, backup plan, or even a source of income. Small moves now mean less regrets later."

Do you want to minimize these regrets and protect your home and wealth from recession? This is the help you can do today.

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One of the best things you can do is start storing cash. If you lose income and cannot pay your mortgage, this provides you with a financial safety net, which provides you with funds to pay for home repairs or other unexpected expenses.

“Make sure you have enough cash on hand,” said Christopher Mediate, president of Mediate Financial Services, via email. "Then, if something goes wrong - roof, heating/cooling units, etc. You will have the money to repair."

Experts say please be aware of how these emergency funds are stored.

“I usually hear clients tell me that their homes have an equity line that they can use if the times are hard to be a replacement for owning traditional emergency funds,” Stephan Shipe, founder of Scholar Financial Advisor, Scholar Financial Felancions, said via email. "What they didn't realize is that banks can easily close or lower these equity lines without your consent. This eliminates liquidity options and can put them in a narrow position."

To ensure ease of access (and earn some interest), make sure you store your funds in a high-yield savings account. You can withdraw funds more easily than using a HELOC, a deposit certificate or an investment account. Always wander around for the best cost.

If your home needs repairs, maintenance or annual adjustments, it's time to get the job done.

“Recession doesn’t care if your water heater fails or roof floats,” Argyle said. “Solve the small problem now – because maintenance delays can get expensive when time is tight.”

Argyle recommends focusing on large systems first: HVAC, plumbing and roofing issues that may quickly constitute large repairs. If you can, take some time to learn how to do some regular maintenance tasks for a home. If the recession hits, this could save you cash.

“The economic cycle is always unpredictable,” Mediate said. “If you’re worried about protecting your assets even during a recession, you need to be proactive.”

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If you can save money, investing in some improvements in the value of a home is another wise pre-recession move. This will help you give you more equality and help offset (at least in part) the decline in value that usually comes with recession.

"Always want to increase equity in the home," Mediate said. "The more equity you have, the more values ​​you will get."

You should also consider curbing attraction - things like beautifying the environment and exterior paintings. If you need to sell a home, these can help you sell a home to potential buyers.

Finally, consider making your home more energy efficient. This will not only increase the value of your home, but it will also save you utilities and electricity bills. If you are struggling financially, that will be an important help.

“Efficiency upgrades aren’t just about green, but about lean,” Argyle said. “Smart thermostats, updated insulation, LED lights, and even low-flow toilets, these adjustments cut monthly expenses and provide you with buffering if your income takes a hit.”

Consider how you might be coping if the recession struggles to hit families hard. What if your income drops and you can no longer afford to pay for housing or other bills? You may have a way to bridge the gap by earning income from your home.

“Don’t wait for the crisis to figure out how your home makes money,” Argyle said. “Can the basement be rent? Can you put space in your room or rent a garage space?”

You can also use the app to rent out your parking space, closet space, pool and other amenities. Explore your options and sounds like there is potential? “Judgement is on now,” Argyle suggested. “That way, if things get tight, you’re not scrambling to the top – you’re activate the backup plan you’ve already tested.”

You can also explore refinancing of mortgages, which can reduce mortgage payments, especially in a recession.

"The good news is that a recession often leads to lower interest rates," Matthew Ricci, a home loan expert and branch manager for Churchill Mortgage, said via email. “You may end up finding a good opportunity to buy discounted real estate or refinance existing debt at lower interest rates.”

In the age of lean finance, the tricky part of refinancing is that you have to pay the closing fee. If you think refinancing is the right strategy for your family, start putting funds on hold for closing expenses. Also, buy the best mortgage lender to find one that can bring you a great deal in terms of interest rates and fees.

Finally, if a recession is imminent, don’t put yourself too much at home. Avoid taking out home equity loans or HELOCs and avoid cash refinancing. All of this will result in more owed on your home, which is a danger if the home value starts to drop.

"Keep housing debt low and payments manageable, so if your job becomes another recession statistic, or smart investment pops up, you can choose from it."

All in all, Shipe recommends that if you are entering a recession, have at least 20% of the equity buffer.

"This provides you with a buffer that may exit the home at a lower price and pay for the closure without spending any money," Shipe said.

It is also best to avoid getting additional loans and work on reducing credit cards and other debts.

"Having a strong emergency fund and low debt payments will greatly help any homeowner's recession," Ritchie said.

Recession prevention is a strategy that helps you prepare and possibly minimize the impact of entering a recession.

There may be a loss of home in a recession. Recessions often come with layoffs that can financially aggravate households, making it difficult to afford mortgages and other bills. Failure to pay monthly may result in foreclosure.

To prevent a home recession, do any necessary repairs now, save a solid contingency fund, protect your equity, and consider renewals to increase the value and marketability of the home. Have a smart backup plan (such as renting a room or refinancing it into a lower monthly payment).

Interest rates, including mortgage rates, tend to fall during recessions. This may make your existing mortgage refinancing more attractive or make you buy for real estate at a lower cost.

Laura Grace Tarpley edited this article.