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When she was laid off in February, Patricia Guerrero was making $70,000 a year. Weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do: She went to a food bank.  It was Good Friday, and a woman helping her offered to pay her utility bill.

"It brought tears to my eyes, and I sat there and I cried. I was like, 'This is really where I'm at?' " she told CNN. "I go 'no way;' [but] this is true. This is reality. This is the stuff you see on TV. It was hard. It was very hard."

Guerrero is estranged from her husband and raising her two young children. She's already burned through her savings to help make ends meet, and is drawing unemployment checks. She has had to take extreme measures to pay for her interest-only mortgage of $2,500 a month. In fact, her mother moved in with her to help pay the bills.

Guerrero even applied for food stamps, but was denied.
"I never used the system. I've been working since I was 15-and-a-half. I needed it now and it turned me down," she said.

Stories like Guerrero's are becoming more common as middle-class Americans feel the pinch of an economic downturn, rising gas prices and a housing crunch, especially in a state like California that has been rocked by foreclosures. On Wednesday, a key government report on the battered housing market found new home sales fell to their lowest level in 13 years in February, suggesting the nation's housing market is still struggling.

Americans also have been attending in large numbers foreclosure fairs where mortgage lenders, financial planners and counselors offer tips to hard-hit homeowners.

"Our economy is struggling, and families in the 'Inland Empire' and across the nation are hurting," California Rep. Joe Baca said, referring to an area of Southern California in his district.

"Our housing market is in a state of crisis due to rampant abuses of sub-prime lending, and unemployment is rising. At the same time, the cost of necessities such as gas, healthcare, and education continue to rise."
Daryl Brock, the executive director of Second Harvest Food Bank in California's San Bernardino and Riverside counties, said his organization supplies food to more than 400 charities in metro Los Angeles, from homeless shelters to soup kitchens to an array of food banks. While the majority of people they help are working poor families, he said they have seen some major changes.

In the last 12 to 18 months, Brock said, the agencies he supplies have begun seeing more middle-class families coming to their doors.

"Our agencies have said there is an increasing number of people coming to them for help," Brock told CNN by phone. "Their impression was that these were not people they normally would have seen before. They seemed to be better dressed. They seemed to have better cars and yet they seemed to be in crisis mode."

He added, "The only thing they can do is give us anecdotal evidence that they think it's because of the sub-prime mortgage meltdown and the housing crisis." See recent trends of foreclosure filings »

A former loan processor, Guerrero knows all about that, although so far she has been able keep her house. She used her tax refund to help pay many of her bills for the first two months, but now that money's gone. She says she's now in a middle-class "no-man's-land."

"It just happened so fast. It happened in a matter of -- what -- two months," she said.

She's eager to get back to work and to hold onto her home until the market turns. But for this single mom, every day it becomes harder to hang on.

"It's just depressing," she said. "For me, I just don't want to get out of bed, but I have to. That's my hardest thing. I have to

The drop in U.S. home prices accelerated in early 2008 and shows no sign of bottoming.

Preowned home prices nationwide fell by a record 11.4 percent in January, according to the monthly S&P/Case-Shiller home price index released Tuesday.

And while Dallas home prices continued to hold up better than those in its peer cities, the closely watched report showed that values here fell by 3.3 percent from a year earlier – the biggest drop yet. Prices locally were down 1.8 percent from December.

"Unfortunately it does not look like early 2008 is marking any turnaround in the housing market, after the declining year recorded throughout 2007," S&P's David M. Blitzer said in a statement. "Home prices continue to fall, decelerate and reach record lows across the nation."

The largest January declines were in Las Vegas and Miami, where prices fell by more than 19 percent from a year earlier. The only market where prices were still rising was Charlotte, N.C., which had a 1.8 percent increase.

Half of the 20 cities Case-Shiller surveyed had double-digit price drops in January compared with a year earlier.

Case-Shiller compiles its price index using sales data for typical single-family homes located in each of the metropolitan areas. The survey does not include condominiums and townhouses. It also only covers preowned properties – no new construction. The Case-Shiller researchers say they compare specific single-family homes that have sold more than once in order to measure true appreciation of a home. They exclude homes that are not typical for an area.

Since the number of North Texas homes on the market has stayed relatively flat in recent months, some analysts are puzzled by the degree of local price declines. In February, just over 43,000 preowned homes were for sale in North Texas. That's down 1 percent from a year ago.

"Price appreciation is driven largely by the inventory levels," said Mark Dotzour, an economist with Texas A&M University's Real Estate Center. "I'm a little surprised we are seeing price declines in Dallas. I wouldn't panic about it."

The latest Case-Shiller report follows figures released Monday by the National Association of Realtors that showed median existing sales prices in February fell 8.2 percent to $195,900. That's the largest nationwide annual drop in the Realtors statistics going back to 1999. Local statistics show that North Texas preowned home sales prices peaked at $158,000 in June 2007. In February, the median price was $138,550, according to the North Texas Real Estate Information System.

That works out to just over an 11 percent decline from the high point last summer. But prices typically fall during winter months.

Yet another national report out on Tuesday said that U.S. home prices fell by 3 percent during the 12 months ending January. That estimate by the Office of Federal Housing Enterprise Oversight also includes data from mortgage refinancings and new home sales. The OFHEO statistics also do not include higher-priced houses.

Economists are already worried that the usually busy spring season could be in jeopardy.

"I wouldn't be looking for a pattern of improvement until April, May or June," said Brian Bethune, chief U.S. economist at Global Insight.

According to the Houston Chronicle, after falling for six straight months, sales of existing homes posted an unexpected increase in February which may have reflected more aggressive price cutting by sellers in some parts of the country, a real estate trade group reported today.

The National Association of Realtors said that sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million units. It was the biggest increase in a year and caught economists by surprise. They had been expecting a small decline.

The trade group reported that the median existing sales price in February fell to $195,900. That was the largest year-over-year drop on records that go back to 1999.

In the Houston area, the trend was reversed. Last week, the Houston Association of Realtors reported a 10.2 percent decline in home sales while the median price actually rose 3.1 percent to $151,430.

Lawrence Yun, chief economist for the National Association of Realtors, said that prices in some formerly hot markets in California and Florida were seeing significant price declines now as sellers try to attract buyers.

Analysts cautioned against reading too much into the one-month rise in sales. Many economists are predicting that the steep slump in housing will not bottom-out until later this year after prices fall further and allow huge levels of unsold inventories to be reduced.

"We're not expecting a notable gain in existing-home sales until the second half of this year, but the (February) improvement is nother sign that the market is stabilizing," Yun said.

By region of the country, sales surged by 11.3 percent in the Northeast and were up 2.5 percent in the Midwest and 2.1 percent in the South. The only region of the country to see a decline in the sales was the West, where they dropped by 1.1 percent.

Sales of existing homes fell by 12.7 percent in 2007, the biggest decline in 25 years. Over the past two years, housing has been in a steep downturn made worse by a severe credit crunch as financial institutions tightened their lending standards in reaction to their multibillion-dollar losses on mortgages that have gone into default.