While the year-to-year comparison shows a sharp decline, it is worth noting that permit numbers in March 2005 were artificially higher due to a building code change in Kansas City, Mo., that prompted many home builders to request permits in advance of the change. March’s total was off a more sustainable 15 percent from the five-year average for the month.

Declines in permit activity in February and March followed a record-breaking winter-building season in the metro prompted by unseasonably mild conditions. Other market settings including a rise in both 30-year mortgage rates and new-home prices are also making home builders more cautious, according to HBA Executive Vice President/CEO Tim Underwood.

“The pace of construction permits at the end of last year is certainly having an impact on the rate of permits now, but there are other factors builders are considering as well,” Underwood said. “Mortgage rates have increased more than one-quarter point since the beginning of the year, and the average new-home sales price has increased 6 percent to more than $275,000. With mortgage rates on the rise and new-home prices continuing to reach new records, it is simple economics than more and more families will be priced out of the new-home buying market.”

Underwood said the decline in permit activity thus far is generally in line with projections for another strong year for housing in the metro. Forecasts have called for a 5 to 10 percent decline in housing starts during the balance of 2006.

“We are optimistic about the market because there is certainly an unmet demand for new homes, particularly for housing styles and types that appeal to a broader range of families and individuals,” he said. “They key to sustaining a strong housing market is developing solutions that make more of these choices available and providing new-home options for consumers that are within their budget.”

Kansas City, Mo., leads the metro area in single-family construction year to date with 569 units. Lee’s Summit ranks second with 181 units followed by Olathe with 171 units and Overland Park with 169. Rounding out the top 10 are Kansas City, Kan./Wyandotte County with 136 units; Lenexa, 120; unincorporated Platte County, 109; Independence, 108; Belton, 105; and Pleasant Hill, 84.

The Home Builders Association of Greater Kansas City (HBA) is the voice of the housing industry and the source for housing information. Comprising more than 1,000 member companies, the HBA represents an industry that contributes more than $2.5 billion to the Kansas City economy and supports more than 36,000 jobs in the Greater Kansas City metropolitan area.