EconomicCrisis.US

Home values in 20 U.S. cities climbed in July by the most in almost four years, helping stem the record plunge in household wealth that’s depressed spending.

The S&P/Case-Shiller home-price index rose 1.2 percent in July from the prior month, the biggest gain since October 2005, the group said today in New York. Another report showed consumer confidence unexpectedly fell in September, while holding above the record low reached earlier this year.

Home values are rebounding as low borrowing costs and government tax credits lift home sales. Combined with rising stock prices, the gains will begin to restore the $13 trillion plunge in net worth caused by the worst financial crisis since the Great Depression, a process that economists such as Brian Bethune say will take years to complete.
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The lowest mortgage rates in 3 months had U.S. consumers clamoring for home loans last week even as the government said on Wednesday it expected millions more foreclosures.

The Treasury Department followed up with a report saying only 12 percent of U.S. homeowners eligible For loan modifications under the Obama administration’s housing rescue plan have had their mortgages modified.

But aside from the mixed picture on housing, the Federal Reserve said the overall economic situation was improving in spite of weakness in the housing and labor markets, while Treasury Secretary Timothy Geithner added that the economy was starting to grow again.
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Monday marks the one-year anniversary of a frightful day that changed economic history. On Sept. 7, 2008, the federal government stunned financial markets by announcing its takeover of two mortgage giants, Fannie Mae and Freddie Mac.

That was just the beginning. In ensuing days, Bank of America took over Merrill Lynch; Lehman Brothers collapsed; credit markets froze up, and insurance giant AIG grabbed at an $85 billion federal rescue.

In a new series, “Financial Crisis: One Year and Counting,” NPR examines the wild events and the efforts of the Federal Reserve, Treasury and Congress to avert an economic catastrophe. The series will count up the costs of both the crisis and the cure. Preview stories in the series:
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Mid-August, 2009, was a peculiar time in the US economy. Wall Street, big banks, and the media were mostly celebrating “economic recovery.” Meanwhile, average Americans were suffering record levels of unemployment, job insecurities, home foreclosures, personal debt anxieties, and the upsets, tensions, and angers that inevitably result. One economist referred to the US as “one nation, two national economies.” Two particular sets of August economic data reveal the deepening economic divide behind the “recovery” talk.
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