CBS News Correspondent Michelle Miller sat down with Donald Brown whose dream of homeownership is slipping away.
"I am struggling to keep my home," he told her.
Brown bought his North Carolina house two years ago, but when his monthly payment spiked 30 percent, he couldn't keep up.
"I am an example of what not to do," Brown said.
Across the country, homeowners are finding themselves strapped between rising mortgage costs and the basic necessities: food, transportation, and utilities. And they are starting to pay those bills with plastic more often.
"I am paying the interest only," Brown told Miller.
"Your minimum payments?" she asked.
"My minimum payments."
Traditionally, Miller reports, people make their mortgage payments first and let other bills slide. But in this downturn, while more Americans are defaulting on their mortgages, 60-percent are making car payments and 40-percent are making those credit cards payments.
"I'm in my last 30 days as far as losing the house," said homeowner Karen Smith.
Karen Smith got a home equity loan on her townhouse, but now she can't pay it back.
"How important is that credit card to you?" Miller asked Smith.
"Right now, it's part of my livelihood. I make my minimum and make sure that it doesn't close on me and I use it."
But only for the basics. As food and gas prices rise, Americans like Smith have less to spend on everything else and the nation's retail sector is taking the hit.
"Shoppers have been caught up in this new reality: 'I can't control the big things, so I'm trying to manage my spending on other things that I can control'," said retail strategist Candace Corlett.
The worst off businesses are stores selling home furnishings and entertainment. And in 2008, the International Council of Shopping Centers projects 6,000 stores could close as Americans decide what they can live without.
HOPE Coalition America provides financial guidance to homeowners in danger of losing their homes. Those facing notice payments challenges should call (877) 592-HOPE (4673).