Following on the still favorable interest rates and strong buyer demand in 2005, this year is poised to see the housing market cool to a healthy and more sustainable pace and remain a critical element to the health of this area’s economy, according to Jeff Waddle, president of the Home Builders Association of Midwest Georgia.

“Nationally, 2006 is expected to be the second or third best year in housing history.” said Waddle. “That’s still a very healthy housing industry”.

Accounting for almost 16 percent of the Gross Domestic Product (GDP), housing production and housing-related services have long been a backbone of the United States' economy. The year 2005 was a record year for the industry, with new single-family home sales reaching 1.282 million, up 6.6 percent from the previous year's annual record growth.

While 2006 levels look to be stabilizing, all regions of the U.S. reported strong increases in housing starts for the month of February. And although construction starts don't predict new home sales, it does prove that housing in 2006 will continue to be a vital component in the national economy..

“The collective strength of the housing industry is undeniable and unshakable,” said National Association of Home Builders (NAHB) Chief Economist David Seiders. “While our forecast shows a six-to-seven percent decline in home sales and single-family housing starts in 2006 from the torrid performance of 2005, it will still be a great year to buy a new home. Many builders have cranked up various non-price sales incentives for prospective buyers. These include optional items in the homes at no cost, payment of closing costs, upfront payment of financing points and 'buying down' mortgage interest rates. The average value of incentive packages (often including several types) is currently about 2.5 percent of the sales price.”

Noting that April is New Homes Month, Waddle said pointed out that homeownership and housing production spur this area’s economy in more ways than one. For every 100 single-family homes built, 245 jobs in the local community are generated during the first year of construction, and 65 jobs every year thereafter. In terms of new income to local business and workers, 100 single-family homes translates to $13.8 million in the first year of construction, with $2 million in additional local taxes and fees, and $3 million every year thereafter with $500,00 in taxes and fees.

In addition to contributing to the local economy, owning a home builds personal wealth -- it is by far the biggest financial asset for most American families. For the typical American household, the equity in their home accounts for 30 percent of their household wealth, far outstripping whatever assets the family might have in the stock market. And most importantly, housing is a solid, steady investment. Home values generally increase over time at a rate slightly above inflation.

The Home Builders Association of Midwest Georgia serves builders in Fayette, Coweta, Spalding, Meriwether, Heard, Pike, Upson, Lamar, Butts and Jasper Counties. More information about the group can be obtained by contacting Sandy Boda, executive officer, at (770) 716-7109.