Cynthia Bowers is a CBS News correspondent based in Chicago.
For months now financial experts have been warning us that the hot housing market was a critical component of the American economy, and we're finding out the hard way they were right.
A little over a year ago I was living in the house of my dreams. We borrowed 90% of the money needed to buy the house; 80% was a 10-year adjustable rate (ARM), and the remaining 10% was an adjustable rate that could go up at any time. For a while we were okay.
Then that Fed rate started going up, and so did our ARM. Over a five-month period it increased the cost of our monthly mortgage by nearly 40%! In retrospect we were lucky that we got in trouble making a monthly note back then and were able to get out without any permanent damage.
We rented a house while we sorted out our finances, and found a smaller house a bit further away from Lake Michigan, and we will try again. We still believe in the American dream -- but we realized that scaling back our dream makes it much easier to sleep at night.