Moreover the situation is bound to get worse before it gets better as according to the trends and the statistics the recession and the failure of the mortgage market is going to increase prices in the long run. This inflationary period will face high utility bills, high consumer prices as well as high level of expenses faced by the general public. As a result it will become highly impossible for the people to even pay off their small installments of their personal loans, car financing and leases as well as even their credit card and phone bills.
As a result it can be clearly depicted that the failure of the mortgage market in the United States is a great disadvantage. “Mortgage rates have fallen far enough below the average mortgage rate paid by existing mortgage holders to spark the refinancing wave, but this has now changed. It takes an incentive of about 50 basis points to encourage refinancing activity, but the move up in yield has reduced the average refinancing incentive for holders of conventional conforming mortgages down to about 25 basis points.” (‘Recession Watch: Inflation Rears Its Head’, 2008) It is predicted however that the impact of the recession can be cushioned by strategically placed and implemented policies.