April's total was down 3 percent from the same period last year, marking the first time since May 2002 the metropolitan area posted a year-to-year comparison decline. A total of 3,268 single-family permits have been issued in the eight-county metro this year, a 5 percent increase over the first five months of 2002.

While low interest rates remain the catalyst for new home activity, improvements in the overall economy will be needed to sustain new home sales, according to HBA Executive Vice President Tim Underwood.

"New home sales remain strong in the metro area despite a soft overall economy," Underwood said. "However, the long-term health of the local housing industry is dependent upon new job creation and other economic improvements."

Despite solid local new home sales, permit activity over the past year has led to a buildup in speculative inventory in certain areas and price ranges. Underwood said home builders are expected to watch new home inventory closely in the coming months.

"With permit activity remaining on a near-record pace, home sales will need to continue rising to reduce inventories," Underwood said. "The next few months will be critical to see if the inventories can be absorbed by the marketplace."

Kansas City, Mo., continues to lead the metropolitan area in single-family permits with 569 permits issued through April. Olathe ranks second with 346 permits, followed by Overland Park with 274 and Lee's Summit with 251.Rounding out the top-permitting cities through April are Shawnee, 212; Raymore, 150; Independence, 132; Grain Valley, 126; Leawood, 98; Kansas City, Kan./Wyandotte County, 94.

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.