A confluence of economic and demographic elements has created a perfect storm for the housing and mortgage industries that some expect to produce the strongest year ever for both.

Citing lower interest rates, historically low unemployment, and a shopping spree by the baby boom generation — which has entered its peak earning years — observers say this is as good as it gets for the housing and mortgage businesses.

“You have to go back to 1992 and 1993 to see a great market like this one,” said David Lereah, chief economist for the National Association of Realtors. “And this is probably even better.”

The housing market has so far been immune to the suffering in the broader economy, Mr. Lereah said. “We’ve just come out of the greatest economic expansion ever,” he said. “We’re hitting on all cylinders.”

January through May of this year were the strongest first five months of any year on record for the mortgage industry, according to the Mortgage Bankers Association.

New home sales should top 900,000 this year, a new record, and existing home sales may reach 5.16 million, the second-highest level ever, it said.

In the first quarter a boom in refinancings and the strong purchase market sent originations for the top 25 lenders soaring to 108% from the year-earlier quarter to $252.6 billion.

On the profit side, mortgage- and housing-related concerns have bucked the trend of corporate losses.

Countrywide Credit Industries Inc. of Calabasas, Calif., reported that earnings for its first quarter, which ended May 31, increased 47% from the same quarter in 2000, to $123.1 million.

MDC Holdings Inc., one of the largest homebuilders in the country, said in late June that it expected to set second-quarter records for net income and earnings per share, and to exceed the high end of analysts’ estimates of about $1.30 per share. In addition, MDC reported that its 4,062 orders for homes in the first five months were 10% higher than the same period last year.

“Nobody has seen housing activity quite this strong before,” said David Berson, the chief economist at Fannie Mae. “The housing market will slow some, but unless mortgage rates spike or the economy really falls into a recession, it’s hard to see what would cause that slowdown to be very serious.”

Mr. Berson said that the economy has slowed but is still moving forward. In addition, with mortgage rates hovering at about 7% and fixed-rate mortgage yields still very low, homes are still affordable.

“This market is incredibly strong,” he said. “There’s more underlying demand for housing than most people thought.” For the year, Mr. Berson expects originations to set a new record of slightly more than $1.5 trillion.

Michael A. Covino, the founder and chief executive of Resource Mortgage Banking Ltd. and of Luxmac Covino & Co., both in Elmsford, N.Y., said his business — he specializes in mortgage loans of at least $1 million — has remained good. Though luxury markets such as Silicon Valley and New York City have slowed a bit, others, such as the west coast of Florida and the Middle Atlantic region, are stronger than ever, he said.

Observers also said that this economic downturn is different from past slowdowns.

Historically, expansions begin to overheat, and then inflationary and interest rate pressures take hold. Next, the housing markets deteriorate, leading the rest of the economy into a downturn, he said.

“This time around you just don’t have that,” Mr. Lereah said. “You have a favorable interest rate environment, favorable inflation, and a healthy housing market; it’s the manufacturing and technology sectors that are leading the downturn.”

Mr. Berson attributed the unique character of this slowdown to the Federal Reserve Board, which stopped tightening interest rates more than a year ago and started easing them six months ago.

Now, with mortgage rates decidedly lower than they were a year ago, the housing market is going strong.

“We had a stronger housing market going into the slowdown, rather than a weaker housing market,” Mr. Berson said. “I think people are going to have to adjust their views on what the underlying pace and demand in the housing market is. I think it’s much stronger than people thought.”

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