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Sept. 12 (Bloomberg) -- What if U.S. housing bears are wrong and the home market is not peaking?

Let's assume for a moment that homebuyers and investors will not be too chastened by high energy bills and mortgage rates will stay about the same.

If the boom hangs in there, thank local economic growth and job creation, low mortgage rates and demographics.

Housing is still appreciating, and U.S. home prices rose 13.4 percent as of June 30 from the same period a year earlier, according to the Office of Federal Housing Enterprise Oversight, the agency regulating the mortgage corporations Fannie Mae and Freddie Mac. That was the largest annual increase recorded by Ofheo in 25 years. New home sales also set a record in July.

Population increases generally follow local job growth, although some high-growth regions are certainly not mentioned in the same breath as bubble markets.

Some of the strongest housing growth, with the exception of Las Vegas and surrounding Clark County, is not in any of the glamor havens on the coasts.

In examining the 100 fastest-growing counties tallied by the U.S. Census Bureau from 2000 to 2003, Georgia easily led the pack with the most new housing units. Almost one quarter (24) of the fastest-growing counties on this list were in the state, with 21 of those counties concentrated in the Atlanta area.

Predictably, Florida was second on the list, with 10 of the highest-growth counties, followed by Colorado and Virginia with 9 each, Texas with 7 and Minnesota with 6.

From 1990 to 2000, Georgia's population grew 26 percent to 8 million, with most of the gain in the Atlanta area. That's twice the rate of increase for the U.S. at large during that period.

With all of its robust growth, why is Atlanta not on the list of likely bubble cities?

There's plenty of land that can be developed, few geographic or government restrictions and a much lower median home price than in the Northeast or on the West Coast -- $166,829 as of the second quarter, according to the National Association of Realtors, an industry trade association.

Compare Atlanta to pricey San Diego, at an average home price of $605,600 or Orange County, California, at $696,100 and it's clear that several areas in the sunny Southeast offer palpable potential gains for investors, homebuyers and employers.

As most savvy homebuyers in the Northeast or California can tell you, building and geographic restrictions have curtailed the amount of developable property. That has translated into higher- than-average appreciation and a greater likelihood that bubbles have formed.

Jobs Drive Homebuilding

What may bolster or stabilize housing prices over the longer term, even if rates head north? Steady job creation that fuels population growth and homebuilding.

Placer County, California, for example, an area straddling the Sierra Nevada Mountains 100 miles northeast of San Francisco, is a case in point. As the only California county on the Census Bureau's top-100 growth list, Placer is benefiting from new job creation and the exodus of Silicon Valley technology jobs.

Buoyed by robust employment growth, jobs in Placer County grew 25 percent from 1998 through 2003, compared with 1.6 percent for the San Francisco Bay area and 8 percent for the state as a whole.

``Job growth has been running from 4.5 percent to 5 percent the last six or seven years,'' says Ed Graves, director of economic development for the county. ``We led the U.S. in job growth from 2002 to 2003.''

New jobs bring people who can then bid up housing prices. Placer County, which is partially included in Ofheo's Sacramento statistical area, showed a housing price gain of 121 percent over the past five years and 25 percent through the second quarter.

Employment growth also correlates with home price gains in the Washington, D.C.; New York, Phoenix, Los Angeles and Las Vegas areas, which were the top-five job producing areas in July among the largest metropolitan areas, according to the U.S. Labor Department.

By comparison, slow or negative job growth often holds back housing prices.

The Detroit area, for example, lost more than 6,000 jobs during the last year and 7.5 percent of its population over the decade. As a result, housing prices in the Motor City area rose only 3.4 percent over the past year, lagging the national average for home-price growth by a factor of four.

No Reason for Change

Even if 30-year mortgage rates rise above 7 percent and job growth slackens, there's no reason to believe that patterns of population migration will change quickly.

Aging Americans in the Midwest and Northeast will continue to move to Sun Belt locales because of lower taxes and living costs.

That doesn't mean that the hottest markets won't see a nasty shift in prices should mortgage rates head north. Speculators are bidding up housing values in the most torrid markets, leading to volatility in prices. The U.S. median home prices slipped to $203,800 in July, versus $219,500 the previous month, according to the U.S. Commerce Department.

Cheap mortgage money may eventually evaporate and housing bubbles will burst. Those not interested in quick profits can buy low and profit in the markets most favored by population and job growth rather than buy high and get burned in the priciest markets.