BINGO... Most of the fools who lost homes bought waaay over their means to begin with. If you're only grossing 50 or 60k a year you're a damn fool to buy a $1,000,000 home. My first home was a 900 sq/ft, 75 year old, 2 bedroom, single bath, fixer upper that I paid $125,000 for (New Jersey). Almost always added an extra $100 or $200 to my mortgage payment every month to pay down the principal and save a bundle on interest as well as build equity. Sold it after 8 1/2 years for $225,000. Moved south and bought twice the house with 6 times the property... cash. Used some of the equity in the home to put up a fence around the pool area and buy wife a new car. The interest on the home equity loan was deductible unlike a car loan.
Speaking of cars. IMO it's foolish to trade in a vehicle every two or three years and buy a new one. (Unless you put excessive millage on them or needs change such as expanding family, need to trade car for truck for work, etc.) I generally keep my vehicles for ten years and two or three hundred thousand miles or more. Even if I have to have put $400 or $500 into a vehicle in any given year to keep it on the road I'm still way ahead than if I were making a $300 or $400 dollar car payment every month. That's not even considering the savings in auto insurance. That new car I bought my wife is now 5 years old and has approximately $150,000 miles on it.
Be savvy and live within your means and you will find that the economy is not as bad as you thought.