When the housing boom is described as an orgy by respected media outlets, then its time for concern.

[[NYT] A Mixed Message: Has it finally arrived, the end of Manhattan’s real estate orgy, the autumn of our discontent?](http://www.nytimes.com/2005/10/09/realestate/09cov.html?pagewanted=print)

[[Newsweek] So Long to the Wealth Effect?: Whatever the root causes of the immense gains from real estate and the stock market, the result has been a marathon shopping orgy.](http://msnbc.msn.com/id/9634477/site/newsweek/)

Over the past twenty years, consumers have become largely dependent on the flexibility to withdraw from their home equity accounts to supplement disposable personal income. In 1980, consumer spending was 63% of gross domestic product and today it is 70%.

[The wealth effect [Matrix]](http://matrix.millersamuelv2.wpenginepowered.com/?p=62) has diminished for the stock market and may happen with housing, depending on where the economy goes over the next year and how the housing market reacts over the next several quarters.

There is now additional risk to consumers. Higher mortgage and home equity rates, higher energy costs and weaker gains in wealth may create problems for consumers, and because of dependency on consumer spending habits, more problems for the overall economy may be on the way. No orgy here.

The alternative sounds less like an orgy and more like a rained-out family picnic. We may see what Great Britain saw two years ago as their housing market peaked. Interest rates were raised to stem inflation and consumer spending dropped, but no recession occurred.