The Housing Boom Gives the Economy a Boost
It's a part of the country's social fabric that is as American as motherhood and apple pie: homeownership.</br></br>Sociologists and economists alike have praised the value of homeownership, because of its beneficial effects on crime and neighborhood stability as well as its stimulative effect on the economy.</br></br>"Housing has a tremendous impact on the economy," said Sung Won Sohn, an economist at Norwest Bank in Minneapolis. "People have said one out of every six jobs in America is housing or related industries. The largest user of copper in the world, or at least in America, is housing. The demand for lumber, aluminum, carpets, all these things are affected by housing."</br></br>Right now, that demand is sky high, helping the economy by offsetting some of the drop in demand for exports from ailing Asian economies. That's because the percentage of Americans owning their own homes is at an all-time high of 66.8 percent, as the chart at right shows. That's an increase from the 1997 rate of 65.7 percent, which broke a record set back in 1980, when the rate stood at 65.6 percent.</br></br>Not surprisingly, housing experts credit the strong economic combination of low inflation and low interest rates for the high ownership rate -- which has risen almost a point from the start of the year. A point may not seem like a lot, but it translates to about 1 million additional homeowners.