Hang Tight -- It Can't Be This Bad Forever

But longer-term mortgage interest rates haven't quite fallen along with CD rates. You can get a 30-year loan for about 6 percent if you have excellent credit, which is a terrific mortgage interest rate if you look at it from a historical perspective but isn't low enough to compensate for the other mitigating factors.

The dramatic drop in home equity has spooked home sellers. Foreclosure rates have skyrocketed, setting records. Banks are still taking weeks to parse offers from prospective buyers. Buyers are getting fed up and are moving on to make other lowball offers. If you have a jumbo loan, in many cases you're looking at a rate above 7 percent, if you have good credit -- and more like 9 percent if you have mediocre credit.

Fighting through all this to get a deal done is like wading through Jell-O. Just ask any real estate agent who hasn't torn his or her hair out yet.

Meanwhile, consumers have been spooked by rising prices on the basic necessities of life. The cost of a gallon gas is roughly the same as the cost of a gallon of milk. (If you want to buy a gallon of organic milk, it'll cost nearly double.) News stories about how consumers are selling family heirlooms on Craigslist and eBay to put peanut butter and jelly on the table are laid out next to stories about how low consumer confidence has fallen. Yuck.

The good news is that, eventually, we'll move through the recession. We'll get through the presidential election (traditionally a drag on any real estate market), and people will start buying homes again.

Starting up a real estate market is a lot harder than getting the stock market rolling. But once it gets rolling, everyone is going to feel a whole lot better.

Q My domestic partner of 11 1/2 years and I have split. We bought a house in 1999. I am on the deed but not the mortgage. I have been contributing toward the monthly payments for the entire time we've owned the property. She wants me to sign a quitclaim so that she can refinance the mortgage to get a more affordable payment. Am I entitled to anything? Will she have to buy my half?

A I'm assuming that you and your domestic partner didn't prepare a business partnership agreement that outlined your financial responsibilities and ownership interests in your property.

Though I'm sure you thought your relationship would last forever (Who doesn't think that?), about 50 percent of marriages end in divorce, and it's likely that domestic partnerships are at least as susceptible to break-ups.

If you had a partnership agreement, it would have outlined what each of you brought to the purchase of the property, who contributed what, what percentage of the property each of your owned, and what would happen if you broke up or dissolved your partnership down the line. When non-married partners buy property, I strongly suggest, they should invest a few hundred dollars in a partnership agreement that covers all of these issues.

It sounds as though you're in a pretty good position. You're listed on the deed, but you're not responsible for the mortgage. If your partner wants you off the deed, you and she should have to agree on a payment that represents your share of the equity in the property.

If you own the property equally, you can ask a real estate agent to give you an estimate of what the property would sell for in the current market. You can even hire an independent appraiser (for about $250 to $350).