The pace of new-home construction in the region has remained largely stable in recent months as home builders continue to focus on reducing higher than normal inventories. The number of active listings on the Heartland Multiple Listing Service fell 3 percent in June to 4,983. The last time the number of homes listed in inventory dipped below the 5,000 barrier was in December 2004. The metro has shed more than 800 units in inventory since hitting a peak of 5,792 listing in September 2006.

While home builders aim to continue reducing inventories, they are also adjusting to consumer uncertainty and sluggish confidence in the housing market. Battling the negative perception about the state of the housing market has been a major focal point of the home building community, according to HBA Executive Vice President/CEO Tim Underwood.

“ Lenders have tightened their loan requirements in response to concerns about subprime loans, and borrowers are steering from more volatile adjustable-rate mortgages,” Underwood said. “While those two loan products certainly helped promote new-home sales in recent years, there are many opportunities consumers are missing in terms of taking advantage of low long-term fixed-rate mortgages and the competitive pricing in today’s market.”

Underwood pointed toward the reluctance of the Federal Reserve Board to lower interest rates to boost the housing sector for fears of inflation. Despite last week’s discount rate cut, there remains much speculation that mortgage interest rates will rise from their current levels. The slowdown in the housing market has also led to lower costs for some construction materials, but Underwood said higher land prices and government fees will continue to put inflationary pressures on future housing costs.

“ There are more factors in favor of the buyer right now than there will be down the road as both mortgage rates and home prices rise,” Underwood said.

Kansas City, Mo., leads the list of top-permitting cities with 840 single-family homes. Olathe ranks second with 389 units, followed by Lee’s Summit with 351. Rounding out the top 10 are Overland Park, 242 homes; Kansas City, Kan./Wyandotte Co., 221; Blue Springs, 181; Grain Valley, 166; Gardner, 158; Shawnee, 138; and Raymore, 129.

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.