Economists project that the nation's booming housing industry should remain steady in 2005, although sales should begin to flatten out. This was the report coming from the the National Association of Home Builders’ (NAHB) Construction Forecast Conference at the National Housing Center in Washington, D.C.

The housing market has been nothing short of phenomenal, especially anything that smacks of homeownership, said NAHB Chief Economist David Seiders. But Seiders also said that the nation’s housing market is in the process of reaching its limits in 2005. Seiders is forecasting a decline in housing starts next year of about 4.2% to 1.85 million units, down from the 1.935 million starts projected for this year. Sales of new single-family homes are forecast to drop 5.2% from a record of more than 1.16 million this year to about 1.1 million.

With the tremendous rise of home equity, which is approaching $9 trillion, Seiders believes that home owner expenditures for additions and alterations should keep the residential remodeling industry growing next year. Annual volume is currently in the $220-$225 billion range.

NAHB is forecasting that fixed-rate mortgages will average 6.5% in 2005, up from 5.9% this year, which would leave the cost of home financing at relatively affordable levels.

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