Lenders look at potential borrowers from many angles before extending credit: How much of its income will a household need to put into debt repayment? How large is the down payment? Does the borrower have a job with a stable income? What is the borrower's credit score?

Distressed properties are often vacant and in disrepair, and thus sold at significant discounts. As the share of distressed sales grows, home prices fall.

If Mr. Trump gets precisely the policies he says he wants, then the economy will suffer a recession.

At the center of every recession is a serious imbalance in the economy and mirrored in the financial system. Think subprime mortgage and the Great Recession, or the technology bubble and the early 2000s recession. There are no such imbalances today.

Defaulting on the nation's debt would be cataclysmic. The U.S. Treasury's Aaa rating is the one constant in the world's financial system. When times are bad anywhere on the planet, global investors flock to Treasury bonds because they know they will get their money back.

Buying a home wouldn't make much sense if house prices were likely to decline further; no one wants to catch a falling knife.

There are different flavors of recession. You can get into some pretty dark scenarios pretty quickly.