For at least the next year and a half, the nation's homebuilders are expected to be busy building close to 1.4 million new homes annually in both 1996 and 1997. This latest news from the National Association of Home Builders' Semi-annual Construction Forecast Conference corresponds with other economists who predict overall economic growth will continue to hover around 2%.

The NAHB is forecasting 1,399,000 housing starts this year. That's up 3.3% from 1995, although it should see a slight 1.4% decline in 1997. Remodeling and repairs are expected to back off from the gangbuster growth we've seen in recent years, but a 2% growth should keep those sectors of the industry healthy as well.

Interest rates on fixed-rate mortgages now averaging about 7.9% should continue a little below that level for the balance of the year, and adjustable-rate mortgages -- or ARMs -- should continue to be priced about 2% below the fixed rate. Recently, ARMs have accounted for only 14% of mortgage loans, but the NAHB's chief economist says that could go up to 25% later this year.

Other economic experts say we can expect the Fed to begin raising its federal funds rate soon after the November elections -- going as high as 6.5% by the end of 1997. By that time, long-term treasury bonds should range from 7%-7.5%, and if you're a new home buyer, you can expect a fixed mortgage interest rate of between 8% and 8.5%.

I'm Michael Holigan, About The House.