Stock market investors understand the financial risks involved and accept price falls from time to time but the same isn't necessarily true of housing market investors.
This might be because stock investors can protect themselves against price falls through swing trading, however, there’s no easy insurance against housing market falls.
Interest rates are critical to the housing market since when interest rates increase, there will be an increase in consumers’ total monthly mortgage payments.
So basically, a rise in interest rates makes mortgage payments difficult for homeowners, and this will eventually decrease the demand for houses leading to prices falling.
Recessions can lead to an increase in unemployment and lower household income. In recessionary environments, home buyers and real investor investors tend to be defensive, lacking the predictability required for a significant investment like a house purchase.
Additionally, recessions can impact existing homeowners who, faced with unemployment, can fail to maintain mortgage payments leading to an increase in bank repossessions.