With 2003 shaping up to be yet another stellar year for residential sales, it’s fair to ask if business can get any better in 2004, especially with the prospect of interest rates inching up as the U.S. economy gains momentum.

With mortgage rates rising, the question now isn’t whether sales will ease but by how much.

The way some analysts keep looking for signs of a housing bubble, they must believe the laws of supply and demand have been revoked. But, a healthy housing market and rising home prices aren’t incompatible.

On any number of accounts, the U.S. economy remains sluggish. Unemployment is up, consumer confidence is down, and the rate of economic growth remains tepid. In the first quarter of this year, growth was about 2 percent. But housing remains well-positioned, thanks in part to low interest rates and continuing sound asset appreciation.