The economy fluctuates due to various reasons, as per the opinion of the economic analysts, by the uneven government policies and by the innate nature of the market. Fluctuations in the economy are now a natural element of life. The modern life has also to bear the political responses due to the fluctuations in the economy. With the sharp nosedive observed into the property market, many people prefer to invest their surplus resources into real estate. The interest rates on the loan to be issued goes down compared to the interest earned on the deposits. The major activity of any financial institute depends on the investment and to earn profit through various sources. They have lot deposit and so as to offer the interest on the deposit, they have to invest those deposits into some fruitful or beneficial investment. It has been observed that interest rates during recession go down as no one requires the commercial or personal loans from the bank. The government tries to excite the economy by lowering the interest rates in recession. Since the government is controlling the rate of interest, it makes easier for the bank to get liquidity. The lower rate of interest affects the business as they can get the loans on the favorable rates. The forex business declines due to lower value of the local currency against the strong foreign currency. Many business houses dealing with import or export business tend to keep their commercial activities on hold due to potential loss in the business. The interest on credit card normally does not decline but the new issues of credit cards offering better interest rates during recession. Recession and interest rates are related to each other; the rates are lowered during the recession and normalized once the recession is over. The interest rates on home equity loan and mortgage declines to some extent as banks have large surplus of funds to offer. Mortgages are long term debts so they react slower to short termed interest fluctuations.

The condition of local real estate market often changes during the economic recession. The housing market goes relatively up as many people are taking advantage of their saving by investing into the housing property. Due to pounding effect of the recession, many people are trying to mortgage or sell of their houses and opt for some cheaper rental alternative till the recession is over and try to survive during extremely lean period. Lack of business and unemployment leads people to discard their housing property as the question of survival is more important to them than living. They cannot command the actual price of their valuables but being a victim of the time, they have to compromise at certain stage. One of the most obvious impacts of a prolonged economic downturn is the increase in unemployment. The output at manufacturing units reduces due to less consumption. In order to survive during the tough phase, people hold their spending power and they spent only for the unavoidable circumstances. The demand of the products is reduced and it is being offered at a much lower or discounted prices. People try to save as much as they can and face the reality of the hard time somehow. The government tries to reduce the recession by making capital more readily available for long term investment.