Of all the benchmarks of the performance of the Washington area's economy in 1999, none looks better than the report card on the region's housing industry.

New home sales are certain to have exceeded 20,000 when the final figures for 1999 are in, says regional analyst Stephen S. Fuller of George Mason University. That's twice the number in the recession year of 1990.

Housing permits in the region totaled 37,603 in 1998, including single and multi-family housing, a huge 22 percent gain over the average for the previous four years. Last year's total was just a touch below that peak, 36,246, according to Standard & Poor's DRI, an economic forecasting and consulting firm.

This year, the housing market will cool off, with 28,128 new housing permits filed, a drop of 22 percent, says S&P DRI.

If so, the slowdown will be felt in many places throughout the region.

The housing industry isn't the point where economic growth starts, most analysts say. But it does amplify and redirect the region's economic energy -- think of it as a kind of growth hormone.

As the region's technology industries sprouted wings in the past several years, a dramatic relocation of jobs around the area has followed, mostly in the expanding outer suburbs. Local residents have shifted to be nearer the jobs, and they've been joined by a large influx of newcomers: The Census Bureau estimates that 80,000 people moved into the region in 1997 from other parts of the United States and abroad.

The money spent by newcomers on cars or investments filters to many parts of the nation's economy. But much of the money for housing is spent or circulated here in construction workers' wages, materials, fees and furnishings, Fuller notes.

One measure of that impact can be read in the financial results of the region's largest home builder, NVR Inc. in McLean, the holding company for Ryan Homes and NVHomes.

In 1989, the last time the Washington area's economy was this hot, NVR sales hit $1.29 billion. Two years later, as the recession pounded the real estate market, revenue dropped nearly by half, to $689 million. But over the past 12 months, NVR's revenue exceeded $1.85 billion, with record profits.

Shareholders joined in that recovery. The company's share price climbed from slightly more than $12 in January 1997, to $57 last July, before dipping to $47 last week in anticipation of a housing slowdown this year.

The housing market's strength has been a boon to builders and sellers, but it has squeezed buyers, particularly those in the middle-income range and below, says Joseph E. Cater III, director of regional economics at Fannie Mae.

"The continued job growth, particularly in Northern Virginia, has brought a lot of people into the region. The result is a bidding war for housing. Unfortunately, that's the flip side" of the housing market's success, he said.

Sale prices for comparable kinds of houses increased 5.6 percent between 1999's third quarter and the same period in 1998, Cater noted, well ahead of wage gains.

Home prices jumped 10.4 percent in the District, evidence of the revival of the city's image and economy.

A softening of the housing market is inevitable, economists conclude, with the expected increase in interest rates this year. It could also be welcomed -- outside the housing and furnishing industry -- if it keeps more housing within the price ranges of future potential buyers, Cater said.

HOME LOANS

Here are the average mortgage loan amounts for single-family homes, new and resale:

In thousands

D.C.

1998: 141.2

1999: 150.1

Montgomery County

1998: 157.5

1999: 153.6

Fairfax County

1998: 158.3

1999: 161.7

Loudoun County

1998: 132.3

1999: 136.5

SOURCE: Experian