We all know the hot housing market of the past four years has cooled off pretty dramatically. What we may not realize, though, a number of economists suggest, is the potential damage to the economy if this trend accelerates.

“Housing is an economic land mine,” a Los Angeles economic consultant, Ruth DeWitt, says. Noting that housing has become a much more significant force in both economic growth and the wealth effect, she believes the economy could be at serious risk, given any sustained slowdown in housing.

Another economist, J.C. Spender of London’s Cranfield School of Management, takes it a step further. “Along with the other problems we have, like high energy prices, the ongoing war in Iraq, plunging consumer confidence, growing inflation, and rising interest rates, any major fall-off in housing prices could not only precipitate a significant economic slowdown, but perhaps even a recession,” he tells me.

Their admonitions come in the face of some disturbing revelations, especially if you’re a homeowner. Chief among them: Last week, in New York City, one of the country’s hottest housing markets, a survey showed the price of an average apartment fell 13% in the third quarter from the second.

* On a national basis, June home sales, without much fanfare, fell 4% year-over-year, the biggest decline since June 1991.

* Just released mortgage application numbers show the slowest pace since April.

* Inventories of up-for-sale homes and apartments are expanding.

Against this background, mortgage debt is piling up like crazy. At the end of the second quarter, it rose sharply to just less than a record $8 trillion, up 65% since 2000. So any sizable housing weakness, which could lead to a faltering economy, might well put a good chunk of this debt at risk.

Deanne Esses, the usually exuberant senior vice president of Bellmarc Realty, pretty much sums up the thinking of a number of real estate brokers on the diminishing tempo of housing activity. “Housing is by no means collapsing, but it’s no longer the go-go market of the past four years. Things have really quieted down,” she says. “Price weakness is everywhere. It takes much longer to complete a sale, and sellers are not as arrogant as they used to be because they can’t afford to be.” The growing weakness, she believes, may partly reflect the fact most people can no longer afford often inflated asking prices and sharply rising maintenance charges.

In a recent commentary, a Merrill Lynch economist, David Rosenberg, notes that one cannot dismiss the fact that housing activity has been a broad and massive propeller of economic growth over the past four years. But the problem, as he sees it, is that the red-hot housing sector may be too much of a good thing. In other words, its sizable and growing contribution to the economy, evident in some pretty intriguing numbers from Mr. Rosenberg, could put the whammy on the economy if the housing market stalls. Those numbers:

* In the last 40 years, housing has averaged 4.5% of GDP. However, with the recent housing boom, its share has moved up sharply to 6%, the highest level since 1978. However, since 2001, that figure has shot up to 12%, and in the first half of this year, housing accounted for an astounding 50% of the overall growth in the economy.

* Since 2001, about 50% of all jobs created in the private sector, and maybe as high as almost 60%, relate directly to the housing boom. What’s more, residential construction employment alone stands at 21%, and on top of that, notes Mr. Rosenberg, the average hourly wage for residential construction workers is higher than that for an average private worker, $17.38 versus $16. Therefore, he adds, the housing boom is not only boosting the payroll count, but also turbo charging aggregate personal income.

* The housing-wealth effect over the last four quarters has accounted for 22% of the rise in consumer spending. Likewise, it has boosted consumer spending by nearly $112 billion over the 12-month period that ended in the first quarter of 2001.

The worrisome bottom line here: Watch out for those pesky housing termites; they could branch out to the economy as a whole.