ATKINSON, Ill. — Confronting the most public anxiety yet of his Midwestern tour, President Barack Obama sought Wednesday to reassure an audience in his home state of Illinois that the economy would recover, but warned that Washington is not the answer to the nation's economic troubles.

He conceded that it will take at least a year for housing prices and sales to start rising, a key marker of an improved economy.

On the final leg of a three-state bus tour, Obama rolled into Atkinson, in western Illinois, for a town hall with residents, and their questions — about government regulations, housing, jobs and the fate of Social Security — underscored the anxiety people across the country are feeling.

The jobless rate in Illinois was 9.2 percent in June, matching the national rate for that month. The Illinois rate is also several points higher than in Minnesota and Iowa, the two other states Obama visited on his tour.

His housing comments were in response to a grilling from a real estate company owner who said she had begun to see a turnaround in late spring but that her phones stopped ringing after last month's "debt ceiling fiasco," when a government default seemed possible.

"We have no consumer confidence after what has just happened," she told the president. "I should be out working 14 hours a day and I am not."

Obama agreed that the tense, last-minute negotiations over lifting the debt ceiling had sapped consumer confidence. "It was inexcusable," he said.

He said, without getting specific, that the administration was mulling ways to encourage banks to resume lending. Companies are more profitable than ever, he said, but are hoarding cash instead of investing it. He said banks that are in the financial clear also aren't lending as freely as they had before.

He said growing the economy overall will trickle down to the housing sector, but that it will take time.

"I'll be honest with you, when you've got many trillions of dollars' worth of housing stock out there, the federal government is not going to be able to do this all by itself, government is not going to be able to do this all by itself," Obama said. "It's going to require consumers and banks and the private sector working alongside government to make sure that we can actually get the housing moving back again."

"It will probably take this year and next year for us to see a slow appreciation again in the housing market," he added, offering no backup for the prediction.

The housing industry remains mired in the doldrums years after the housing bubble burst, despite historically low mortgage interest rates that during better economic times would encourage home-buying. The Commerce Department reported this week that the number of homes under construction is the fewest in 40 years — just 413,000 compared to 1.6 million homes being built a decade ago.

Obama used the rural setting — he spoke inside a warehouse in front of sacks of seed corn stacked high on pallets — to make it appear that he is not a fixture of Washington and is as worried about local concerns as he is about issues vexing the nation's capital. Obama represented Illinois in the state Senate and the U.S. Senate and told a man asking about federal regulations that he spent a lot of time thinking about "downstate issues."

Obama also mocked the tea party, without mentioning it by name, and Republican candidates who sign anti-tax and other pledges.

"I take an oath," he said. "I don't go around signing pledges."

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As he has done throughout the tour, the president made another pitch Wednesday for the public to help him win policy and political fights with Congress by pressuring their elected representatives to put the country's interests above all else.

"If you're delivering that message, it's a lot stronger than me delivering that message," he said.

Obama easily won Illinois, his home state in 2008. Henry County, where Atkinson is located, is a heavily Republican district, which Obama nevertheless won three years ago. But Illinois elected five Republicans in 2010 and also sent Republican Mark Kirk to fill Obama's former U.S. Senate seat.

Obama was to preside over a second question-and-answer session Wednesday with residents of Alpha, Ill., before leaving his customized black bus and boarding Air Force One for the return trip to Washington.

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