Quarter of US Population See a Depression

According to a poll printed in the USA Today in an article titled Anxiety rises as the era of easy credit comes to an abrupt end. The second poll question shows that people feel things are bad now but should be better in a year. Lets take a look at the article -

Nearly one-quarter of adults — 23% — believe the U.S. economy is in a depression, according to a USA TODAY/Gallup Poll taken Monday and Tuesday. That's nearly double the 12% who said so in February.

People haven't lost hope. Nearly half — 47% — say they expect the U.S. economy to be growing a year from now. That's roughly unchanged from the 44% who expressed the same view in the earlier poll.

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Consumers are relying on credit cards more than ever, especially as it gets harder to land home equity loans. Revolving debt — much of it on credit cards — hit a record $969.9 billion in July. People are starting to use their cards for necessities such as groceries and gas, credit counselors say.

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Mortgage rates fell after the bailout of Freddie Mac and Fannie Mae, but now they're inching up. HSH Associates says the average rate on a 30-year, fixed-rate mortgage was 6.14% on Wednesday, up from 6.02% last week.

But banks are making it hard for many borrowers to take advantage of the low rates by tightening lending standards. The bar likely will be raised much higher now that Freddie Mac and Fannie Mae have been taken over by the government.

While it is good people are optimistic things still have a ways to go. We still have to enter the second half of the mortgage meltdown - the Option ARMs. That means more falling home prices, more foreclosures and more financial problems. Our optimistic projections are that maybe by 2010 or 2011 we should be see some recovery and home price stabilization.