Housing Starts Holding Steady but Costs Continue to Climb (February 2021)
The number of single-family housing permits issued in February held steady compared to January 2021 and this time last year, according to the Home Builders Association of Greater Kansas City’s (KCHBA) monthly Residential Building Permit Statistics report. With 482 single-family permits issued, February’s total was up slightly from the January 2021 count of 406. Similarly, the number of single-family permits in 2020 year-to-date was 830 and in 2021 that number rose to 888.
But there are concerns about how the rising costs of materials and interest rates will affect the industry as the year continues. Lumber prices continue to climb with no signs of reversing course anytime soon, according to KCHBA members in the industry. Additionally, interest rates have increased the past two months to slightly above 3 percent, according to Freddie Mac.
“A recent study by the National Association of Home Builders has determined that 1.3 million households will be unable to purchase a home priced $346,757 if mortgage interest rates increase from 2.75 percent to 3 percent,” said Will Ruder, executive vice president of the KCHBA. “Given this striking cost-sensitivity datapoint, it is more important than ever that our municipal and county partners recognize that seemingly small, incremental increases in building and development requirements will mean the difference between families being able to afford a safe, efficient newly built home or not.”
Kansas City, Mo., issued the most single-family permits in the eight-county area with 97, followed by Overland Park, Kan., with 50. Lee’s Summit, Mo., Olathe, Kan., and Blue Springs, Mo., rounded out the top five municipalities in residential permit counts with 42, 38 and 25, respectively.
Johnson County was the top single-family permitting county with 155, followed by Jackson County with 110, and Clay County with 76 single-family permits issued in February.
Click here to view the February 2021 Residential Stat Report.