May’s home-building activity served as another notice that despite historic low mortgage rates and competitive housing costs, buyers remained hesitant to make a move amidst rising gas prices, weak employment numbers and recession fears. Home builders both locally and nationwide are calling on Congress and the Administration to act quickly on measures to boost both the housing market and the overall economy.

“ There is no doubt the slowdown in the single-family housing market continues to have a ripple effect throughout the entire economy,” said HBA Executive Vice President/CEO Tim Underwood. “While new-home inventories are falling, consumers know that mortgage rates and prices are in their favor but concerns about the overall economy are keeping the housing market from a more rapid recovery.”

Underwood said a temporary home buyer tax credit included in the American Housing Rescue and Foreclosure Prevention Act of 2008 would provide a significant boost to the housing market and help bolster the overall economy as well. The first-time home buyer credit of $7,500 would apply toward the purchase of any home used as a principal residence purchased between April 9, 2008 and April 1, 2009.

“ The home buyer credit would address many issues of the current housing downturn,” Underwood said. “The tax credit would boost sales, lower new-home inventories and stabilize both home prices and mortgage markets. Home builders here in Kansas City and nationwide are urging Congress to take action to help everyone affected by the housing market slowdown.”

While single-family housing starts remain sharply down from a year ago, the more volatile multifamily market continues to post higher numbers. An additional 30 multifamily homes for sale and 109 rental units were permitted in May, boosting multifamily numbers up more than triple from activity a year ago. Combined, a total of 2,720 housing units have been permitted so far this year, leaving the market down 19 percent from a year ago. Nationwide, total housing permits are down 34 percent from last year.

“ The good news is in regard to home sales, starts, inventories, prices and foreclosure rates, Kansas City continues to outperform national averages and is superior to many other metropolitan locations,” Underwood said. “Yet locally we still need to boost the housing sector to improve the health of our regional economy.”
Kansas City, Mo., led the list of top-permitting cities through May with 360 single-family home starts. Olathe ranked second with 176 units, followed by Lee’s Summit with 85 and Kansas City, Kan./Wyandotte County with 80. Rounding out the top ten were Overland Park with 69 units; unincorporated Platte County, 66; Raymore, 49; Blue Springs, 45; and Lenexa and Shawnee, tied with 44.

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.