Fwd: 2024-2025 US Recession

I'm reposting this from r/economy for you all to see.<br><br>Hey all. Not sure what drew to me to this sub first. The discussion quality here is leaps and bounds ahead of the economy sub. I’ll try to make this as quick as possible (fingers flying over the keyboard as we speak), but I wanted to know your opinion on my recession predictions for the US next year. Below is the first comment I wrote on the economy sub and I’m bringing it here for your consumption. <br><br>“Here’s how I think the next recession will go down (Keep in mind I’m no economist, just an armchair one). <br><br>Recession will begin at the end of 2024 and will continue into the beginning of 2026. <br><br>Major recession catalyst: exploding interest rates, a housing market in shambles, and debt obligations finally getting too big for the government to deal with. <br><br>Increase in credit card debt due to high interest rates. It will be harder and more expensive for consumers to get credit cards. Shouldn’t be too hard to avoid credit card debt if you’re smart about it, but there will be several people who take these credit cards, won’t be able to pay them back, and default on their debt. This will lead to several large banks being in danger of insolvency. (This is already happening, to an extent). <br><br>Car loan debt is another potential problem area and several people will also default on car loans. It’s harder to get a car loan, but that’s not going to stop people. Watch car loan debt defaults tick up. <br><br>The housing market will slow down to historic norms (no more 20-30% increases in value) and people who bought houses in the last 10 years will see a reduction in home equity. This will lead to at least several hundred thousand people with negative equity in their homes and thus will stop paying their mortgages. I’m trying to avoid the words “housing market crash” but that’s what this is starting to look like right now. I wouldn’t go out and buy a house if you don’t have to right now. <br><br>Several people will default on their mortgages due to the accompanying rate hikes (higher rates means higher interest payments, thus more unaffordable houses). This will lead to an uptick in foreclosures and an increase in inventory of houses that the banks own (REOs). <br><br>There is a housing shortage in the US; there just aren’t enough houses for the population. With houses in danger of being foreclosed on, prices skyrocket and house sales explode. This is where you will see home equity skyrocket and houses will become more expensive. You may even see the market rebound due to the lack of supply. Don’t buy into that. This will just be a dead cat bounce. <br><br>The problem is, you have houses with prices that are inflated due to reckless speculation and prices unsupportable by the underlying fundamentals. These houses are gonna lose value and eventually see the air let out of them (pop goes the bubble…..again). Several hundred thousand houses will be flipped to the banks when the defaults happen and will be resold in a depressed market. Higher interest rates will stifle demand for houses so you’ll have houses at unsustainably high values with no demand for them. Prices will come down and several people will lose their homes. <br><br>Several hundred thousand people will lose their homes due to foreclosures and it’ll get worse from there. Banks will be in danger of insolvency, which will lead to a credit crunch. This is where money will start to dry up and inflation and unemployment will skyrocket. <br><br>It’ll get bad. It’ll be on the level of 2008, maybe even worse.