NEW YORK (AP) -- Not so long ago it was so young and robust it plowed through all obstacles in its path. Now the economy awaits the latest bad news weakened by excess and apprehensive about the latest medical report.
The demise of the dot-coms was followed by the profit warnings from established companies. And the layoffs. Then the repeat postponements of what had become known as the ''inevitable recovery.''
Recovery, it is now broadly conceded, might not be quick and vigorous. And the negatives keep piling on.
Consumers are in debt. Stocks remain depressed. Much of the world's economy is weakened. Foreign trade is falling. The automotive industry, powerful until now, shows signs of having peaked. Can housing be next?
Maybe not. It could even become the last line of defense against recession, the savior of an economy after all other sectors failed. There is evidence to support the thesis, to wit:
Housing has played a special role throughout the economic downturn, and its role may not have been played out yet. It continues to be the major beneficiary of falling interest rates and easy lending terms.
Those easy terms, including home equity loans and easy refinancing at lower rates, have allowed recent buyers and owners to transform equity into consumer spending, helping to keep the economy afloat.
But there's more. Home ownership is also the ordinary American's tax shelter, allowing deductions and deferrals not granted to renters, or in fact even to owners of Individual Retirement Accounts and 401 (k) plans.
It doesn't end there. Housing is destined to benefit from in the future as it has in the bast from demographic eccentricities, as indicated in Harvard University's ''The State of the Nation's Housing.''
As the oldest of the echo boomers -- they are the offspring of the post-World War II baby boomers -- reach young adulthood, they'll drive up demand for apartments and starter homes, the report states.
''Baby boomers, meanwhile, were well within their peak earning years, strengthening demand for second and trade-up homes, as well as for luxury apartments,'' the study's researchers state.
Meanwhile, minorities will have an unusually large impact on housing demand. Indeed, the report continues, ''minorities will account for about two-thirds of household growth over the next ten years.'' Much of the increase will come from the Hispanic population, which already has shown substantial gains in homeownership over the past few years.
And so, the report concludes, ''Housing production in the coming decade should rival -- if not exceed -- 1990s levels.''
Still another factor may be involved, that being the relatively recent disaffection of stock investors who have seen their shares plunge while home prices rise.
The bursting of the Nasdaq bubble, says economist Edward Yardeni of Deutsche Bank, has convinced many small investors to put more of their assets in their own residences and less in stocks.
While housing might not be primarily an investment, it remains one of the best.
As Yardeni points out, at the end of the January-March quarter, owners' equity in household real estate rose to a record high of $6.2 trillion, a gain of 12 percent from a year earlier.
With gains like that, owners have been able to offset much of the equity lost in stocks. And since they have the best borrowing terms of any economic group, they have used their new wealth to fuel consumer buying.
And to date, at least, they show indications of continuing to play that role in the future.
End Adv PMs Tuesday, August 21.
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