May’s strong performance leaves the new-home construction market in line with forecasts that projected new-home starts down as much as 10 percent in 2006. A total of 4,498 units have been permitted year to date through May, 10 percent off the 5,001 units permitted through the first five months of 2005. The metro area was down 13 percent from last year through April.

While market research shows some building inventory in certain price ranges and niche markets, the fundamentals of the local housing market remain positive, according to the HBA Executive Vice President/CEO Tim Underwood.

“While much has been made of rising short-term interest rates, increases in long-term mortgage rates have been more moderate,” Underwood said. “With 30-year mortgage rates averaging just over 6.5 percent, the opportunity for consumers to take advantage of historically low rates remains very attainable.”

Undewood also pointed toward the strong local job market and moderate real estate appreciation, which has insulated Kansas City from significant declines in new-home construction and sales. He said the metro has been one of the most solid, steady performers in the nation’s housing boom, which has protected the metro from more pronounced boom-and-busts cycles in new-home construction.

“Our challenge simply lies in meeting the market. We need to continue developing progressive alternatives for providing more housing choices for the largest share of Kansas City consumers, which continues to be working families looking to make the move to new-home ownership.”

The region’s breakdown by market share also remains steady compared to one-year ago, with market leader Johnson County remaining on top with 29 percent of all new permitted units. The biggest gains belong to Cass and Platte counties, which both gained two points to 12 and 9 percent shares respectively. Clay County has posted the largest decline, down four points to 17 percent market share behind Jackson County, which is down two points to 20 percent.

Kansas City, Mo., leads the metro area in single-family construction year to date with 943 units. Olathe ranks second with 411 units followed by Lee’s Summit with 286 and Overland Park with 282 units. Rounding out the top 10 are Kansas City, Kan./Wyandotte County with 224 units; Lenexa, 177; unincorporated Platte County, 176; Independence, 157; and Raymore, 157; and Shawnee, 146.

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.