The decline of the housing market may spawn consumers who are not as strong as they have been, according to Frederick S. Breimeyer, a Boston-area economist for the Federal Deposit Insurance Corp. Breimeyer addressed a group of bank executives at the BankWorld 2006 conference in Cromwell earlier this week.

“Housing has been a spectacular investment,” Breimeyer said. But the debt behind it has risen, he added, and the personal savings rate has fallen. Many people are using their homes as a form of savings.

“The expectation is that this is going to change,” he noted.

The drop in home sales also is affecting the mortgage markets.

“Affordability has suffered somewhat and is likely to suffer more,” Breimeyer said.

Refinancing remains popular, but the mortgage market is changing over time. There already has been some payment shock as interest rates rise for people with hybrid adjustable-rate mortgages.

Connecticut, overall, has weathered the recession well in terms of unemployment, staying below the national and New England averages. But unemployment in some urban areas – particularly in Waterbury and Hartford – is not declining, Breimeyer said.

And despite publicity surrounding the layoffs at Electric Boat Co. in Groton, Connecticut’s share of prime contract awards from the military has grown.

“Connecticut has been doing actually very well,” Breimeyer said.

The state is also relatively energy-efficient, ranking 34th in the country, which will help matters as energy prices increase.

However, the long-term outlook in terms of the national economy is “not cheery,” Breimeyer said.

“We very quickly come to the realization Â… that the social programs will become very costly,” he said. “This is a train wreck.”

The trade deficit also is expanding over time.

But economic growth, at acceptable rates, is expected to continue, he said.

Breimeyer has served on economic advisory committees and in leadership positions on both the regional and national levels. A two-time president of the New England Economic Partnership, he currently serves on the board of the Mass Insight Education and Research Institute, as a member of the Board of Economic Advisors of the Associated Industries of Massachusetts, and as a member of the Business Research Advisory Council of the Bureau of Labor Statistics.