According to multiple third-party sources, prices continue to rise in many sectors of the economy and consumer confidence levels are at their lowest since the 1980s. The May Reuters/ University of Michigan index of consumer confidence was at 59.5, but a comparison of statistics from previous years suggests
that the current cycle really might not be that bad.
During the 1978-1982 market downturn the average 30-year fixed mortgage rate was 13.5%, according to Freddie Mac. Interest rates have been hovering around 6% for the first half of 2008 and the unemployment rate in May was 5.5%. In 1982 the average unemployment rate was 9.7%, according to
the U.S. Department of Labor.
In a speech delivered in May by Federal Reserve Chairman Ben S. Bernanke, he said that there is no quick fix for the economy and that it will simply take time for the correction to occur.
As the government works to jumpstart the market by sending economic stimulus payments to more than 130 million households, it’s up for debate whether consumers will save the rebate, spend it or pay down debt. While consumer confidence remains low, spending continues to move ahead at a slow pace. A recent USA Today/Gallup phone survey showed that 45% of those polled said their standard of living is better
now than it was five years ago.

For Region: Chicago

• Brian Cumpton
• Mortgage Lender, Wells Fargo