For the year-to-date, new-home construction is 8 percent off last year’s record pace. A total of 7,822 single-family permits have been issued so far this year, the fourth-highest year-to-date total on record through September. Permit activity helped the third quarter end just 6 percent off the pace for the same period in 2004.

The steady rate of new home construction during the last six months shows the local market is demonstrating strong stability amid rising mortgage rates, elevated sales prices and concerns over fluctuating costs and possible material shortages in the wake of hurricane recovery in the Gulf Coast, according to HBA Executive Vice President/CEO Tim Underwood.

“The healthy, stable growth we are seeing in metro Kansas City right now is good sign for the local housing economy because it demonstrates there remains a strong demand for new homeownership,” Underwood said. “There is certainly room for more growth in housing choices for first-time buyers and lower price ranges, but the solid permit rates we’ve seen during the past six months are preferable to the up-and-down construction cycles in other metropolitan areas.”

Underwood said the short-term impact from Hurricane Katrina has been primarily limited to higher material prices caused primarily by rising fuel and transportation costs. When recovery mode moves to reconstruction mode, Underwood said higher prices and some material shortages are possible.

“There is certainly some question as to what the inflation costs for a new home will be in the next six months to a year,” Underwood said. “The likelihood of higher prices and higher mortgage rates may spark more interest from buyers who may want to purchase now before the cost of homeownership is higher down the road. It will make it more imperative that local cities and developers work together to develop progressive solutions to slow the rising costs of housing in Kansas City.”

Kansas City, Mo., leads the metro area in new-home construction with 1,308 single-family permits issued so far this year. Olathe ranks second with 669 permits, followed by Lee’s Summit with 604 permits and Overland Park with 457. Rounding out the top 10 are Raymore, 368 permits; Kansas City, Kan./Wyandotte County, 340; Shawnee, 333; Gardner, 330; Independence, 297; and Lenexa, 267.

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.