May’s boost in activity followed a modest 1 percent decline in April that ended a run of 10 consecutive months of positive moves in single-family permit activity. Metro single-family building permits are up 6 percent for the year-to-date with 4,201 permits issued through May. A total of 3,974 permits were issued through the first five months of 2002. At the current pace, single-family permits are on course to establish a new record for local home-building activity, eclipsing the 10,285 permits issued in 1999.

Housing activity has been buoyed by record low interest rates. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage held steady this week at 5.21 percent, the lowest level recorded since the company began tracking mortgage rates in 1971.

“There is little doubt that record-low interest rates are driving the local housing market,” said HBA Executive Vice President Tim Underwood. “Low mortgage rates make it easier for everyone to take advantage of the benefits of homeownership. As a result, housing is continuing to play a crucial role in the health of the overall local economy.”

Underwood said the summer months would be critical as builders seek to reduce new home inventories, particularly in certain price ranges. While low interest rates have stimulated sales for first-time home buyers and upper-bracket homes, sales of move-up homes in the $300,000 to $450,000 have been dampened due to a soft job market. “Low interest rates can do a great deal to stimulate new homes sales, but a strong job market is essential to long-term growth,” Underwood said.

Kansas City, Mo., continues to lead the metropolitan area in single-family permits with 738 permits issued through May, up 29 percent from the same period last year. Olathe ranks second with 440 permits, followed by Overland Park with 334 and Lee’s Summit with 328.

Rounding out the top-permitting cities through May are Shawnee, 266; Raymore, 189; Independence, 166; Grain Valley, 150; Kansas City, Kan./Wyandotte County, 146; and Leawood, 124.

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.