Mortgage Crisis Looms Large for US Economy

The sub-prime mortgage shakeout is already having a significant impact on the US economy. The Seattle Times reports that "More than 24,000 workers nationwide who have lost jobs in the financial-services industry since the beginning of the month with more than half coming since last Friday." With few exceptions, the cuts are the direct result of woes in the nation's housing market." Since the beginning of the year, over 38,000 jobs have been lost, and more are expected. It's possible that indirect job losses haven't even begun to mount.

The problem is making it harder for consumers to find mortgages and to refinance existing mortgages to make payments more affordable. As more and more people get into financial trouble, more homes will go on the market, resulting in further declines in home sales and increased listings of homes for sale -in all, a very difficult market in which to sell a home in order to avoid foreclosure.

Because home resale values are declining, more and more borrowers are finding they no longer have equity in their homes. Equity they relied on to keep them out of financial trouble, and equity many have relied on to fund a home business or small business startup. Lenders are tigthening credit standards on all types of loans, so capital is getting increasingly difficult to find. There seems to be no doubt that the troubles will work their way into other areas of the economy as consumers become increasingly skeptical and curb spending even further.

What can you do? Well, to protect yourself from losing income through a job loss and to make an effort to provide a better spending cushion to hang on to your home, you might consider looking for part-time work if you're already employed. Stay-at-home moms and dads might be well advised to look for work at home jobs if they haven't already started doing so. And, if you've been putting off starting that low-investment home business, maybe now is the time to take another look. It's like anything else in this world - you can't rely on others to take care of you - you need to look out for number 1 - yourself and your family. If you can find a legitimate work at home job or can start a low start-up cost home business, in the long run you just might be better able to weather the storm of US economic cycles and start building or replenishing an emergency fund.

Whatever you decide to do, try to work smarter, not harder. For one thing, if you already have a job, do what you can to hang on to it. Don't let your job-hunting or home business planning activities interfere with your work. Don't fall for any work at home job scams. And, think about areas that could potentially benefit from the housing slump - don't become a sleazy foreclosure con artist, but do think about what consumers and other businesses need most or are likely to have an increased need for if the problem worsens, and then do your research and take action to protect yourself in down times. Don't panic and do avoid acting out of desperation. Try to maintain a positive attitude - remember that this, too, shall eventually pass.

Related Topics:

Understanding the Sub-Prime Mortage Mess
Protecting Yourself from Unemployment
How to Make Your Current Job Work
What's Your Net Worth?
Home Business Ideas
Finding Work from Home Jobs