According to the Conference Board, consumer confidence is at its lowest in the last 16 years. Since 1982, consumers have not faced such a bleak future in terms of jobs and inflation. With housing prices at low ebb, gasoline costing more and inflation affecting food and medical bills, consumers are indeed hard hit.

This is reflected in the fact that fewer people are spending on high expenditure items like cars and homes. Consumers appear confronted with the walk away prices for all sorts of goods.

With rising gas prices, 2007 saw fewer people using their own vehicles and resorting to public transport instead. Statistics from the American Public Transportation Association support this, showing a two percent increase in the usage of public transportation last year. In fact, the Department of Transportation recorded that Americans drove 4.3 percent fewer miles in March 2008 than a year ago. This amounts to 11 billion miles less in the overall count. The Energy Information Administration too anticipates a 0.4 percent fall in gas consumption as compared to last year.

As with gas consumption, a pullback has also been observed in the housing market. With fewer people investing in homes the prices have fallen steeply. The Office of Federal Housing Enterprise Oversight (OFHEO) reported that housing prices went down by over 3 percent in the first quarter of 2008. In 43 states the purchase index reflected a fall in prices with California and Florida showing the highest decline. Wyoming, Utah, Montana, Texas and Alabama however showed an appreciation in home prices.

The purchase index bears testimony to the all encompassing credit crunch as well as the fear holding the housing market in its grip, even in areas which are economically strong.

The trends reflected by the purchase index are significant. The calculation of the price declines are based on homes that have been purchased with conventional loans from the government sponsored Fannie Mae and Freddie Mac. These secondary market providers are overseen by OFHEO. This makes the report all the more significant as these calculations exclude volatile jumbo and sub-prime loans unlike other purchase indices.

The Commerce Department offers a ray of hope in this situation. According to it, April 2008 saw new home sales going up by over 3 percent. Although this figure is still 42 percent less than what it was at the same time last year, it is an optimistic sign. And maybe, home buyers are not at the walk away price yet.

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The sudden stampede that occurred with regards to take up the bill introduced by the Senate could also lead to a real and serious problem. According to Sen. Mel Martinez (R-Fla), this could be a homecoming week for many, and if so many families would be expecting the renovation and reopening of foreclosed properties, there could be some situation of extreme-end problems.

The Democrats, in the meantime, sought to ratchet up the stress for the Republican reaction to act upon by pointing the Fed’s rescue for Bear Stearns. However, as these bold actions were about to take place in order to help Wall Street, there came a requirement for helping millions of Americans living on Main Street. Christopher J.Dodd (D-Conn), the chairman of the Senate Banking Committee. Dodd and Sen. Richard C. Shelby of Alabama, the top Republican in the entire committee, states that they would like to work and come up with a bipartisan bill.

Democrats vowed that they would like to push for a vote on the bankruptcy provision. Kathleen Day of the Center for Responsible Lending advocated for a group of borrowers that needed changing their banking terms and policies. To their essential relief, any measure could be taken with the changing banking law as well as the “essential component” to a major relief. This would enable 60,000 people to stay back in their homes instead of having to let go of their hard-earned property, saving many people from foreclosure in the long run.

The White House has stated that threatened by the vote over the bill regarding the provision and Martinez, there have been a possibility of postponed change that would bring a “poison pill” which could doom any number of bills. Congressional acts as that of foreclosure actions taking place have in fact sky rocketed nationwide. In California itself, about 31,676 homes were seized under foreclosure while the fourth quarter of last year experienced a tumultuous 421% increase in the total sum period during a year.

California came to be on the front lines of foreclosure crisis as Sen. Barbara Boxer (D-Calif) has stated on the first Tuesday of this month, while demonstrating a chart listing all the 7 Californian cities among the major 10 nation-covering ranks with high foreclosure filling rates. It remains to be seen whether this measure will find success in reducing the number of foreclosures in the state. Only time will tell.

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