But brace for leaner times as declines in home sales steepen nationally and ripple through the economy.

In the past few weeks, reports have shown home sales slowing, price increases easing and the number of homes on the market rising. On Thursday, the Commerce Department said housing starts, or the pace of home construction, fell almost 8 percent in February.

Locally, home sales have bucked the downward trend, and no one expects that to change. But that doesn't mean that the region will escape the wider fallout that could come with an economic slide.

How sharply the economy turns depends on how far and quickly housing markets fall or flatten. Many economists think they will find soft landings over the next two years and merely cool, rather than halt, the economy. Others predict a recession that would spur the Federal Reserve to lower interest rates to stimulate investment and job growth.

Whatever the case, the transition from a hot housing market to one that is not will bring pain, especially in markets where speculative buyers have bid up prices beyond sustainable levels.

Fewer home sales nationally will mean less dramatic increases in home prices and perhaps even price drops in many parts of the country, forecasters say. That could leave the average consumer with a lot less home equity to borrow against for major purchases such as cars, plasma TVs and remodeling kitchens and bathrooms. It would be a big blow, because consumer spending drives about 70 percent of the national economy.

"All that borrowing and spending is what propped us up in the past few years while job growth was relatively weak," said Joel Naroff, an economist in Holland, Pa. "If that spending drops off, there's got to be something to replace it or we'll see a steeper slowdown than expected."

Most economists think the U.S. economy will grow at a rate of 2.5 percent to 4 percent this year before slowing further in 2007.

If home values decline in major cities people may be less inclined to move or trade up when they can't get top dollar for their homes.

The resulting drop in home sales would hurt the construction, real-estate and financial-service industries. As revenues in those industries decline, so could the number of people employed as mortgage brokers, realtors, contractors and construction laborers, Naroff said.

The declines would likely be felt in home furnishings and appliance sales, too.

Add it up and nation's economy is in for a fall in 2007, said James F. Smith, an economist at the University of North Carolina at Chapel Hill.

If home sales and starts decline more quickly, "2007 could become a replay of 2001, without the terrorists," he said. That was the last time a hyperactive market fell sharply and brought the economy to a brief standstill. For some, the signs point in that direction.

Home sales fell in January for the fifth straight month, prices started to level off in certain cities and the number of homes on the market hit an eight-year high, according to the latest figures from the National Association of Realtors. More increases in interest rates could further dampen sales.

The average 30-year mortgage rate edged down from a 2 1/2-year high to 6.34 percent this week, the second-highest level since mid-November, Freddie Mac reported Thursday.

Meanwhile, the Commerce Department estimated that the construction of new homes and apartments fell 7.9 percent in February, to a seasonally adjusted annual rate of 2.12 million houses. That followed a surge in January that was attributed to warmer-than-usual weather. Falling home sales and the return of cold weather are being blamed for the decline.

Forecasters predict that sales of existing homes and construction of new homes will decline from about 5 percent to 6 percent in 2006. That still would be the second-best year ever. If markets cool more steeply in 2007, other sectors of the economy might start to cut back on investment and hiring.

"It doesn't take a lot of cessation of employment growth to pitch the economy over the edge," Smith said. "It's the stone in the pond rippling out. And if other areas of economy don't pick up that slack, you're likely to get a recession."

The South in particular could see a drop in migration from the Northeast, where people will find it harder to sell their homes or get the prices they expect.

"That means transplants may start coming here with less money, or not come," said Mark Vitner, senior economist for Wachovia Corp. That would hurt the Triangle housing market, which has benefitted significantly from Northern transplants and retirees.

But as speculators in Northern markets back away from commitments or dump holdings, inventories there would rise and compound price declines, Vitner said.

He estimated that sales could tumble an additional 7 percent nationwide in 2007.

"If we have a hard landing, overall growth will be slower. And housing markets are so interconnected that not even the Triangle could escape a hard-landing scenario," he said.

Local prices are stable

The good news for the Triangle is that home prices never exploded in the first place. They plodded along at their historic annual increase of just under 3 percent right through the housing boom. That makes them unlikely to decline, on average. If they do, it might be good news for some.

For renters who have shied away from buying, now may be the time to spot deals as the housing market turns from a sellers' to buyers' market, said Lawrence Yun, senior economist for the National Association of Realtors.

The same may be said of homeowners considering a move to another area. Triangle home values are likely to fare better than average in a downturn, lifting the currency of people looking to move elsewhere. According to Census Bureau figures for March, the Raleigh-Cary area had 71.4 percent homeownership in 2005, compared with 67.4 for all metropolitan areas, 68.9 percent nationally and 70.9 for the state.

The bad news is that most forecasters predict higher mortgage rates and fewer buyers.

"If you borrowed most of the equity in your house, now is the time to save and pay down debt or risk foreclosure," said Smith. Indeed, household mortgage debt has more than doubled since 2001, to about $1.07 trillion last year, according to figures this month from the Federal Reserve. Incomes are up less than 20 percent over the same period.

Not all agree that the nation's housing-based economy is in any significant trouble, nor that rising interest rates will push down home values next year. The Triangle -- one of the most consistent, albeit slow, appreciation markets in the country -- should remain especially stable.

"I would expect as good a year as last because nothing demographically is changing here," said Stacey P. Anfindsen, a managing partner with Birch Appraisal in Cary.

From April 2000 to July 2004, Wake County added 91,654 residents, more than any other county in the state, according to the Census Bureau. That level of growth is expected to continue.

Partly as a result, Triangle home sales were up 14 percent in January over January 2005, compared with a slight decline nationally.

Anfindsen said that the stock of new homes in the Triangle decreased about 3 percent in January. Nationally, housing stock hit an eight-year high.

And in any case, Anfindsen doesn't think there are localized bubbles elsewhere, for the most part. "Houses don't behave like stock. If you see home values decline a little, you don't immediately get on the phone with your broker and say 'sell.' "