The housing market turbulence has played a key role in the economic and credit chaos that has swept the US and around the world, with countless numbers of US homeowners saddled with mortgages that do not they can pay. If one were to compare the reason for the downturn in the economy with that of the Great Depression, one could easily conclude that this economic crisis is no less severe. The US Federal Reserve recently revealed that the economy is expected to contract between 0.5 and 1.3 percent in 2009, hit by rising unemployment, the credit freeze and the housing crisis. .

In the midst of such difficult times, the people of America require an economic plan that promises to ease the financial crisis, help boost the economy, and provide long-awaited relief to homeowners in more ways than one. The $789 billion economic stimulus package claims to revive the housing market by countering the home mortgage crisis and providing relief from plummeting home values. However, one can hardly deny the fact that American financial experts are skeptical about the prospects of this stimulus package that claims to help stem the wave of foreclosures. Can this plan bring relief to the hardest hit areas like Arizona, California, Florida, Nevada and certain areas on the East Coast?

Walls Street showed little confidence in the stimulus plan as stock prices fell to record lows after the stimulus plan was announced as government figures confirmed a drop in home construction and fell further; it brings more constraints on the real estate market despite the stimulus plan.

Real estate experts like John Courson, executive director of the Mortgage Bankers Association, expressed concern about the projection the package may actually provide homeowners. He expresses his deep apprehension because, like other housing experts, he feels this stimulus plan “offers little help to borrowers whose loan exceeds their home value by more than 5 percent.” According to Simon Constable’s Wall Street Journal report, Weiss Research analyst Mike Larson outlines the fact that this plan would lead to massive government spending and eventually lead to rising mortgage rates. This interest rate hike would further undo the chance of a housing recovery.

Experts also believe that the stimulus plan could create colossal federal deficits for years to come. The US budget deficit to $533 for 2013, a deficit that stood at $1.3 trillion before the recent stimulus plan passed. According to the Wall Street Journal, this deficit may now exceed or reach $1.9 trillion after factoring in the stimulus plan.