March 24, 2025 | Recession Watch: Cratering Condos and Creeped-Out Consumers

Most of the following charts are from Wolf Street or the Kobeissi letter. Definitely follow those guys.

Cratering Condos

There’s no way to overstate how crazy US home prices have become. To take just one metric, the median US household income is $79,200, but it takes an annual income of $124,200 to buy the average American house. That’s a gap of $45,000, up from -$4,000 in 2020.

So it should come as no surprise that parts of the housing market — like condos — are rolling over.

Obviously, prices have to fall way more than this to get back to “affordable.” So the carnage is just beginning.

Creeped-Out Consumers

A growing number of Americans are carrying credit card balances and making the minimum payment — which is to say they’re paying 25% interest on growing loan balances.

The inevitable result is higher credit-card defaults.

This, in turn, leads consumers to view the economy as deteriorating.

Increasingly stressed homeowners are trying to tap their home equity to make ends meet, but are being rejected at a record rate.

And here come “pay as you go” loans for — get this — DoorDash food deliveries:

DoorDash Partners with Klarna to Offer US Customers Even More Convenience with Flexible Payments

New partnership gives customers more ways to pay for groceries, retail, meals and more

Mar 20, 2025

(DoorDash) – Klarna, the AI-powered payments and commerce network, and DoorDash, the premier local commerce platform, have partnered to offer Klarna’s flexible range of payment options to DoorDash customers. In the coming months, DoorDash customers will be able to enjoy Klarna’s seamless range of payment options when purchasing groceries, retail, and even DashPass Annual Plan – on DoorDash.com or through the DoorDash app.

When customers reach check-out, they’ll see Klarna as an additional payment option, giving them more freedom to choose how they want to pay. Options will include:

• Pay in Full allows customers to pay for what they love right away using Klarna’s seamless payments experience.
• Pay in 4 allows customers to pay in four equal interest-free installments
• Pay Later allows customers to defer payments to a more convenient time, such as a date that aligns with their paycheck schedules

David Sykes, Chief Commercial Officer of Klarna said: “Our partnership with DoorDash marks an important milestone in Klarna’s expansion into everyday spending categories. By offering smarter, more flexible payment solutions for groceries, takeout, and retail essentials, we’re making convenience even more accessible for millions of Americans.”

Sudden Slowdown

The Atlanta Fed’s GDPNow real-time Q1 estimate of US growth has cratered to -2%, and other economists are starting to adjust their forecasts accordingly.

John Rubino March 24th, 2025

Posted In: John Rubino Substack

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