The August total marked the lowest performance for local new-home construction since January when a seasonally adjusted 478 housing units were permitted. The decline in residential construction is a mixed-blessing for the local market. While the slowdown in housing starts poses a risk to the overall local economy, the reduction is necessary to reduce higher than normal inventories, according to HBA Executive Vice President/CEO Tim Underwood.

“ The long-term success of both home builders and new-home communities is tied to reducing overbuilt speculative inventories,” Underwood said. He pointed toward the latest inventory report from the Kansas City Regional Association of Realtors that showed total new-home inventory at its lowest level since December 2004.

“ We have a long way to go to return to normal inventory levels but the good news is that home builders are making progress,” Underwood said.

Home builders are also taking optimism from the Federal Reserve Board’s decision to cut the federal fund rate one-half point Tuesday. Lower rates may be just the jolt needed to spur consumers to take a closer look at buying a new home and benefit from the opportunities in the current housing market.

“ The growing number of housing choices, competitive prices and low long-term mortgage rates make this a favorable opportunity for buyers to take advantage of new-home ownership,” Underwood said. “The challenge is restoring consumer confidence in the housing market. Now is the time to keep mortgage rates low and inject optimism into the housing market. I believe the Fed’s decision Tuesday to lower interest rates shows it is committed to boosting the housing sector.”

Kansas City, Mo., leads the list of top-permitting cities with 937 single-family homes permitted year to date through August. Olathe ranks second with 451 units, followed by Lee’s Summit with 385. Rounding out the top 10 are Overland Park, 280 units; Kansas City, Kan./Wyandotte Co., 258; Blue Springs, 188; Grain Valley, 173; Gardner, 170; Shawnee, 154; and Raymore, 151.

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.