HOUSING: Better to Buy Now Than Wait Till Later

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The boom is being fueled by lending institutions stuffed with available mortgage money. During the past two years many cautious consumers fattened their savings accounts instead of spending. The country's savings and loan institutions, prime source of housing mortgage money, not only replaced the cash that drained out of them during the money squeeze of 1973-74, but grew heavy with funds that no one wanted to borrow. Now mortgage interest rates have declined to a national average of 8½% to 8¾%, v. 9% at the height of the money squeeze, and S and Ls are requiring as little as 10% down, compared to 1974 when buyers had to put up as much as 30%.

Is there a limit to the housing spiral? President Carter's energy conservation program, announced last week, will certainly take at least some of the luster off the great American Dream of a home in the suburbs. Gasoline prices —and thus commuting costs for many suburbanites—seem destined to rise sharply over the next several years, along with home heating costs. Some home builders in temperate and colder climates are now including wall and ceiling insulation, but much of the country's existing housing stock lacks proper protection. That may make it difficult for newhouse buyers to get rid of their old ones. Although it picked up last month, multifamily construction has been slack as the market continues to absorb a glut of new building of that type completed during the early 1970s.

Still, Otto Eckstein, a member of TIME'S Board of Economists, forecasts total 1977 housing starts of 1.9 million, down a bit from the March pace but about 24% higher than last year. For the moment, at least, a house in the suburbs appears to eager buyers to be a kind of inflation hedge with crabgrass.