Metro New-Home Permits Dip in October

November 25, 2009

by Kansas RealEstateRama

November 25, 2009 – (RealEstateRama) — The extension and expansion of the first-time buyer tax credit will come as good news for local home builders and consumers. After posting the best monthly performance in nearly a year in September, new-home construction in metro Kansas City dipped 8 percent according to statistics compiled by the Home Builders Association of Greater Kansas City (HBA). A seasonally adjusted total of 190 single-family homes were permitted in October, down from 207 units permitted in September.

The metro outperformed national numbers showing that new-home starts fell 11 percent in October. Locally new-home permits had not posted a month-to-month decline since June, the longest rally for the housing market since mid-2008.

Home builders say the slowdown in October was largely fueled by uncertainty over the first-time buyer tax credit. Until Congress and President Obama moved to extend the credit earlier this month, the credit had been schedule to expire Nov. 30. Home builders expected the impact of the credit to wane closer to the expiration as builders would not have enough time to complete new starts for sales before the deadline.

The extension and expansion of the credit should provide a significant boost for consumers while helping the housing market head toward recovery. The $8,000 first-time buyer tax credit has been extended until April 30, 2010. The credit has also been modified to allow for more construction lead time, allowing buyers who have signed contracts by April 30 an additional 60 days to close the sale. Homebuyers who have not owned a home during the last three years may qualify for the credit.

The expansion of the credit also allows some existing home buyers to qualify for a credit of $6,500 towards the purchase of new home. Buyers who have owned the same principle residence for at least five years during the last eight years may qualify for the credit.

“The extension and expansion of the home buyer tax credit was a smart move by Congress and the president,” said George Schluter, HBA interim general manager. “The first-time buyer tax credit has helped to stabilize housing values and restored consumer confidence in the housing market. While the housing market is improving, we need to keep the recovering continuing in 2010, and the extension and expansion of the credit will do that.”

The HBA was one of the nation’s strongest advocates for extension and expansion of the credit. The association posted videos on YouTube earlier this year that generated nearly 10,000 viewings and local home-building professionals lobbied Congress with more than 2,000 e-mails and phone calls backing expansion and extension of the tax credit.

Kansas City, Mo., led the list of top-permitting cities through October with 447 single-family homes permitted. Olathe ranked second with 241 units, followed by Overland Park with 99 and Lee’s Summit with 88. Rounding out the top ten were Kansas City, Kan./Wyandotte County with 78 homes; Gardner, 68; Leavenworth 63; Platte County, 55; Blue Springs, 45; and Shawnee, 41.

The Home Builders Association of Greater Kansas City (HBA) is the voice of the housing industry and the source for housing information. Comprising approximately 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

Contact Matt Derrick
Vice President of Communications
Home Builders Association of Greater Kansas City