The local new-home market is continuing to outperform national levels despite last month’s decline. Nationwide, single-family building permits are down 6 percent since the beginning of the year. Local new-home construction is up 17 percent over the same time frame. Activity over the first five months of the year suggest that despite concerns over rising mortgage rates, there remains consumer demand for new homes, according to HBA Executive Vice President/CEO Tim Underwood.

“ While local home builders are continuing to reduce inventories by slowing speculative construction, many indicate solid demand for build jobs and custom homes,” Underwood said. “There is no doubt that a significant portion of the buildup in inventory is due overbuilding of certain home prices and styles. There remain under served niches in the market for new housing choices.”

Underwood said an emphasis on progressive, sustainable development approaches including mixed-use development, traditional neighborhood design and housing for age 50-plus consumers will help provide a better mix of housing choices demanded by new-home consumers.

“ Homeownership rates are rising fastest among baby boomers, young singles and couples without children,” Underwood said. “Local communities and the housing industry need to focus on providing choices that meet the lifestyle and budgets of these groups to maintain a balanced housing market.”

Mortgage rates also will have an impact on home-building activity in the months ahead. According to the latest mortgage rate survey from Freddie Mac, 30-year fixed mortgage rates have increased more than a half-point during the last month.

“ It’s critical for consumers considering a new-home purchase to realize the record-low mortgage rates we experienced in recent years were the exception not the norm,” Underwood said. “We expect mortgage rates to rise in the future as bond yields rise and the Federal Reserve continues to take an aggressive approach toward inflation. Despite the recent rise in rates, consumers will likely benefit by taking advantage of low rates before future increases occur.”

Kansas City, Mo., leads the list of top-permitting cities with 613 single-family homes. Olathe ranks second with 292 units, followed by Lee’s Summit with 243. Rounding out the top 10 are Overland Park, 182 homes; Kansas City, Kan./Wyandotte Co., 136; Grain Valley, 134; Gardner, 106; Shawnee, 101; Blue Springs, 93; and Lenexa, 90.

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.