KANSAS CITY, Kansas (AP) -- By late Saturday afternoon, only three prospective homebuyers had visited the open house Valerie Morrill was hosting. The Prudential real estate agent recalled a year ago, she'd see 10 to 15 people during an open house in this midtown Kansas City neighborhood.
She said the government's efforts to bring stability back to the economy and the credit markets may help but she's seen no immediate improvement.
"It's just the buyer pool is so low," she lamented. "Eighteen months ago, you needed $500 to buy a house." Now, all the special rates and government programs are gone, leaving buyers facing a 10 percent down payment. "You have to have money and nobody has money."
And there's the rub.
Despite the Bush administration's historic and head-spinning $700 billion rescue of the financial industry, it will do little to ease lending standards so more homebuyers can qualify for loans, nor has it had much affect on mortgage interest rates so far.
By purchasing mortgages en masse from banks and other lenders, the U.S. Treasury will have more power to stop the cascade of foreclosures and help more Americans keep their homes, which will act as a brake on falling prices.
The question is, how fast can they act? More than 4 million homeowners were already at least one month behind on their loans at the end of June, and almost 500,000 homeowners had started the foreclosure process, according to the Mortgage Bankers Association.
In California, for example, some neighborhoods have been blighted by the plethora of empty homes. Joe Minnis, a real estate agent for Prudential California, knows foreclosed homes in San Bernardino that have been systematically stripped, trashed and tagged by gang members.
"Neighbors are taking turns parking their cars in the driveways of vacant homes just to make it look like someone lives there." he said.
Over the weekend, Minnis held an open house on behalf of a bank that is trying to unload foreclosed homes in the area. He said he was satisfied with the turnout on Saturday, and said buyers and sellers seem "more positive - now."
"People got really scared" last week after the Dow Jones industrial average tumbled and the government had to bail out American International Group, Minnis said. "Thank God somebody saved them because that would have been catastrophic."
On Saturday, Treasury Secretary Henry Paulson outlined a simple plan - less than three pages - to restore confidence in the U.S. financial markets. But restoring confidence in the real estate market and among homebuyers appears more complicated.
"We are seeing buyers. The interest is there. But people have problems," said Marc Montalvo, who is trying to sell a house in Hollywood, Fla., that he bought as an investment in June and fixed up. "They can't qualify for the mortgage. Or they need to sell their home before they can buy another, but that house isn't selling. Or they have been through foreclosure. We try to work with people because we want someone in the house."
But by lunchtime on Saturday, no buyers had responded to his open house posting on Craigslist.com. He sat on a red love seat that is the lone piece of furniture in the home, listening to his iPod and keeping and eye on the landscapers taming the yard's runaway summer greenery.
He said he believed the recent government's recent actions may boost buyer confidence, but has reservations.
"People want to buy. The problem is you can't get them qualified for financing because the lenders have tightened up so much that only people with the highest credit ratings get approved," Montalvo said. "We haven't seen the interest rates fall and the qualifications become more realistic."
In fact, on Friday the average rate on a 30-year, fixed rate mortgage rose to 6.11 percent, up from 6.07 percent a day earlier, according to financial publisher HSH Associates. The average rate had fallen as low as 5.87 percent on Tuesday, but investors are clearly still jittery.
So is Kara LaGrassa, who was out looking at newly listed homes for sale on Sunday. She said the government's rescue package hasn't helped her decide whether to buy a new house or renovate the one she and her husband currently own.
LaGrassa, a 39-year-old homemaker, said the bailout makes her both "a little nervous" and "a little angry."
Angry because the government is spending "lots and lots of money to bail people out who ... were not being responsible," she said, referring to both individuals who bought more house than they could afford and the companies that lent to them.
Nervous because she's not sure if it means the housing market has bottomed or if there's farther to fall.
"Am I going to lose money investing in a house right now?" she asked. "Where is it going to end?"
Marianne Armshaw in Miami contributed to this report. David Twiddy reported from Kansas City, Christopher S. Rugraber from Virginia.