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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