June’s total was down 10 percent compared to the same month in 2006, the smallest year-over-year monthly decrease so far in 2007. During the past year, local home builders have been striving to reduce speculative inventories amid weaker sales and a slow down in the overall housing market. The lower rate of new-home construction is a positive sign that the market is adjusting to current conditions, according to HBA Executive Vice President/CEO Tim Underwood. However, Underwood said the HBA expects to continue seeing lower activity than the metro experienced during the housing boom in recent years.

“ The housing industry is without question in a period of adjustment and that correction will take time,” Underwood said. “The good news is that inventories are dropping and there are sectors of the new-home market performing well, particularly the custom market and homes for first-time buyers.”

Underwood said price ranges with the highest inventories are generally from the mid-$200,000 to $500,000. He said consumers in this group are dependent upon selling their current home and sensitive to changes in mortgage rates. While the national average for 30-year fixed mortgage rates gained a half point in recent months, forecasts call for rates to remain steady in months ahead.

“ The biggest challenges the Kansas City housing industry faces right now are the higher than normal inventory levels in certain price ranges and public perception about the state of the market,” Underwood said. “We are seeing home builders and developers responding positively by scaling back speculative construction. It’s a time for both the industry and communities to take a look at the homes being provided and make sure they match what consumers want.”

In terms of public perception, Underwood said the industry is focused on helping consumers understand the benefits of buying a home in today’s market. “Mortgage rates are lower now than they will likely be in the future and the slow down in construction has meant lower prices for materials such as lumber and other wood products.” It’s a great time to buy a home and take advantage of the benefits of homeownership at time when the market is in correction rather than when the market is on the upswing and prices are rising.”

Kansas City, Mo., leads the list of top-permitting cities with 711 single-family homes. Olathe ranks second with 326 units, followed by Lee’s Summit with 313. Rounding out the top 10 are Overland Park, 213 homes; Kansas City, Kan./Wyandotte Co., 201; Blue Springs, 164; Grain Valley, 157; Gardner, 139; Shawnee, 122; and Raymore, 107.

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.