“Poor weather conditions certainly helped to limit the number of new homes started by builders in January,” said HBA Executive Vice President/CEO Tim Underwood. “At a time when home builders are focusing on build jobs, this winter’s weather has reduced the likelihood of builders undertaking speculative construction.”

The slowdown in starts has also drove down the number of new homes listed for sale in metro Kansas City. According to Heartland Multiple Listing Service, a total of 4,601 new homes were listed for sale at the end of January, a decline of more than 20 percent from the peak of 5,792 listings reached in September 2006.

While the decline in new-home starts and falling inventories are viewed as positive steps in the right direction toward stabilizing the local housing market, Underwood said close attention needs to be paid toward the housing choices being provided by local developers, builders and cities. As inventories fall, he said buyers will have fewer options and higher prices remain a likely possibility as production costs continue to inflate.

“Much of the build-up in inventory we have seen has occurred in the move-up market, particularly for homes priced more than $300,000,” Underwood said. “There are signs that inventory for some price ranges, especially for first-time buyers, are already reaching near more normal levels. As buyers return to the housing market attracted by lower mortgage rates and competitive prices, we must make sure we’re building the styles and types of homes at prices consumers want and need.”

While single-family new-home starts were sluggish, multifamily activity posted its highest January level since 2001 with 342 rental apartment and townhomes permitted. A total of 664 units were permitted in January 2001. While multifamily activity is more cyclically and sporadic, Underwood said demand for more rental homes is expected as the single-family market continues its correction.

“Rental homes are a housing choice by nearly one-third of Kansas City households, and activity among multifamily rental homes has been weak in recent years,” Underwood said. “It’s another indication that we need to focus on broader housing choices for all metro Kansas City households.”

Kansas City, Mo., led the list of top-permitting cities in January with 60 single-family homes permitted. Olathe ranked second with 27 units, followed by Overland Park with 14 and Lenexa with 12. Shawnee and Lee’s Summit tied for fifth with 10 new homes, followed by Raymore with 7. Rounding out the top 10 with six new homes permitted each were unincorporated Jackson County, Leawood, unincorporated Leavenworth County, unincorporated Platte County and Kansas City, Kan./Wyandotte County.

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.