The US housing market is remarkably resilient having more or less weathered the majority of recessions since the 1930s, and is bearing up astonishingly well at the current time despite the Covid-19 pandemic. In fact, you won't believe how buoyant the market remained during some of America's worst economic downturns. Looking back over the years, we reveal what really happened to home prices in previous recessions...

The Great Depression officially lasted from August 1929 through March 1933 but the US economy didn't show any real signs of recovery until 1939. Triggered by the Wall Street Crash of 1929, the catastrophic downturn devastated the American economy with GDP falling by 26.7%.

As banks and businesses collapsed in their droves, unemployment peaked at almost 25% and the poverty rate skyrocketed to a record 45%. Needless to say, house prices plummeted, dropping 31% during the depression, and didn't recover for 19 years. Pictured is an eviction in progress in Los Angeles.

When an extreme and long-lasting downturn hits, the resilience of the US housing market is severely tested. Fortunately the circumstances these days are vastly different compared with those in the 1930s, hence a slew of forecasters envisage a rapid V-shaped recovery from our current pandemic-induced recession.

America's post-Second World War economic miracle ran out of steam in the early 1970s. Nixon administration price and wage controls, the 1973 and 1974 oil shock, global steel crisis and a nosediving stock market sent the nation hurtling into recession. The downturn differs from others in that stagflation was the key feature: inflation and unemployment remained stubbornly high while gross domestic product (GDP) growth slowed, declining by 3.8%.

Given inflation was out of control, house prices actually shot up in the US during this recession. New home sale prices for instance increased by 7.5%. At the beginning of the downturn the average price of a house sold in America was $36,600 (£30k) with the figure creeping up to $40,900 (£32k) by Q1 1975 when the recession ended, a rise of 11.7%.

While inflation was the key driver keeping prices high, the fact the recession was caused by factors that had nothing to do with housing lessened its effect on the residential real estate market. This partly explains why analysts believe the impact of the coronavirus recession may not be so severe.

Stagflation persisted through the 1970s and by 1980 inflation had increased to a hefty 13.6%. The Federal Reserve responded by hiking up interest rates, which slowed the economy and sent unemployment soaring to 7.8% (the image shows an unemployment line in Detroit). This recession was relatively short-lived thankfully with a GDP decline of only 1.1%.

House prices increased by 4.5% during the downturn as inflation stayed high. Studies show rising unemployment generally correlates with falling house prices, but this isn't always the case as the 1980 recession proves.

Basically, unless the rate of unemployment is very high, say over 10%, the majority of homeowners and first-time buyers alike still have a job and any adverse effects a sub 10% unemployment rate may have on prices can be offset by other more favourable factors.

Just a year later the US economy entered into recession yet again. The disruption to the global oil supply caused by the Iranian Revolution of 1979 was biting hard by this point plus the Fed was still grappling with shockingly high inflation, which peaked at 22% in 1982. All in all, the US economy shrunk by 3.6% during this 16-month downturn.

Unemployment hit 10.8% and with interest rates punishingly high – they surpassed 20% in the third quarter of 1981 – the housing market was feeling the burn. Nevertheless, house prices still managed to rise 1.9% during the recession but this is of course significantly below inflation.

As was the case during the energy crisis recession, the US jobless rate is currently in double digits at 13.3%. Still, the spike appears to be temporary. The rate has been falling since April when it peaked at 14.7% and is expected to drop to 8% by the end of the year, which should help keep home prices from falling off a cliff.

This eight-month recession had a number of causes, from the Iraqi invasion of Kuwait, which led to the 1990 oil shock and Gulf War, to a tightening of monetary policy. Other direct and indirect causes include stock market volatility and the savings and loan crisis. Comparatively shallow, the recession shaved 1.5% off America's GDP.

A housing bubble that was developing since the mid-1980s burst in this recession with nominal prices slipping 0.9%. Real home prices however fell by as much as 7% and in some parts of the country, New York City for instance, they didn't revert to their late 1980s levels until 2002.

This recession just goes to show an economic downturn doesn't have to be severe and long-lasting to have a profound effect on the housing market. And as we have seen, by the same token some of the deeper past recessions have had strikingly little impact on the residential real estate sector.

The dot-com bubble started blowing up in the late 1990s as investors scrambled to plow insane amounts of money into internet startups, many of which were grossly overvalued. The bubble burst spectacularly in 2000 and a recession followed, which though compounded by the 9/11 attacks and several major corporate accounting scandals, was relatively mild with GDP contracting by a modest 0.3%.

House prices rose 4.8% during this recession and new home sales climbed to an all-time high. Low interest rates and a massively deregulated mortgage market were already fueling a housing bubble and according to Yale economist Robert Shiller, the 2000 crash transferred frenzied speculation from the stock market to residential real estate, further inflating the bubble.

What this stock market-led recession shows is that if conditions stay favourable, i.e. interest rates remain low and banks remain willing to lend, the housing market can coast through an economic downturn with prices even increasing in certain circumstances, especially during bubble periods.

The housing bubble that had been inflating since the late 1990s grew to monstrous proportions in 2006 and 2007. Years of risky lending practices culminated in a record number of foreclosures, sparking the subprime mortgage crisis. This in turn spooked the markets, resulting in a stock market crash and deep recession during which time US GDP fell by 5.1%.

The bloated, overvalued housing market was the number one cause of the Great Recession and as you're probably aware, home prices crashed in a major way. An 18% decline over six months in 2008 was the sharpest on record and while the figure averaged a less severe -13.9% during the recession as a whole, prices continued to fall, bottoming out at -33%, with some metro areas such as Las Vegas seeing even more dramatic drops of up to 62%.

The US housing market was at the root of the Great Recession, so it's no wonder home prices fell so starkly. In contrast, the current Covid-19 recession has come at a time of relative strength and stability for the residential real estate sector, and this combined with the other factors we've mentioned should go a long way toward minimising its impact on prices.

Loved this? Check out these expert predictions for the US housing market