Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said the economy is experiencing moderate growth, but still facing a few headwinds, including the stress of depressed home prices. "Home prices have dropped more than 30% since 2006 and continue to decline in certain markets," he said in a speech Friday. "The declines are holding back repair of household balance sheets." Furthermore, Lockhart said one-fifth of all U.S. households have mortgages that are underwater or higher than the home's actual worth. Business are also facing the ripple effects of tighter underwriting guidelines that are slowing loan originations. "New business formation is constrained by tight credit," Lockhart said. "Early-stage businesses — a major source of jobs — are often financed in ways other than direct loans. Continuing difficulties getting home equity loans — related to lower home values, of course — and tighter credit card availability are holding back some entrepreneurs." Other headwinds include higher gas prices and rising food costs, which has added $50 to the average household's monthly expenses, Lockhart said. Write to Kerri Panchuk.