In a forbearance, the homeowner pays interest and principal on a smaller mortgage, at least for a time, but still owes the full amount. The lower monthly payment helps with affordability, giving stressed homeowners a break.

An overheating economy, characterized by accelerating inflation and rising interest rates, is another precondition for recession. This doesn't describe today's economy.

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.

In a normal time, I don't think economic policy makes a large difference one way or another. But in times of crisis it makes all the difference in the world.

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.

Predicting recessions is indeed a dark art, but I think we are several years away from the next one.

Potential home buyers have a two-step decision process. First, they determine whether they can afford to make a purchase - does their income safely cover their mortgage payment? Then they determine whether owning is a better financial choice than renting - are the costs of owning a home lower than the cost of renting it?