More pain for buyers

If you are in difficult economic straits, don't bother trying to finance big-ticket items with your credit cards or obtain an auto loan, Leonard and others said, unless you are willing to pay high interest rates. The new, lower rates are only for those in the very best financial condition. A person with the median U.S. credit score of 723 would not qualify for the best interest rate -- and half of all Americans have lower scores.

If there's a bright spot, it's for consumers such as Karene Tansey, 27, of Aliso Viejo, and her husband, Christopher, 31, who expect to soon buy their first home. They have been preapproved for a mortgage, and Karene Tansey says they expect to have no trouble finding a house they will be able to afford "even if for some reason one of us loses our job."

The Tanseys have little debt and excellent credit scores. They've been saving their money and waiting for years for prices to come down to a point where they could buy a house without having to stretch.

"We're making sure to look at a price range that's going to fit us no matter what happens in the market," Karene Tansey said. "We're not going to be house-poor."

But for most people, it could be months or even years before the situation eases, economists said.

"A couple of years ago they were giving credit like candy," said McBride of Bankrate.com. "Now we're a couple of years away from standards loosening up to find that middle ground."

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peter.hong@latimes.com