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Interest rates are now one of many factors decreasing confidence in the national housing market as the new year begins.
The National Association of Home Builders and Wells Fargo released their Housing Market Index earlier this month, which surveys builder confidence in the market for newly built single-family homes.
Confidence is at a 5-month low at 42 points, a 5-point decrease compared to January.
Will Ruder, executive vice president of The Home Builders Association of Greater Kansas City, said the metro is historically insulated from deep market fluctuation.
“Kansas City is unique,” Ruder said. “Our peaks are never as high, but our valleys are never as low.”
We talked to him this time last year about code changes in Kansas City, Missouri, that slowed work.
In 2024, permit applications were down 54% in Kansas City proper, but up 14% across the metro.
“Our housing policy here in Kansas City is largely made at City Hall,” Ruder said. “So we are encouraging our city leaders to recognize that. Both their current residents as well as their future residents are in an intense competition for relatively limited supply and we need more housing.”
Experts said proposed tariffs, stagnant interest rates and the risk of deportation for some skilled workers could increase the time and cost of building a home.
Ruder encouraged cities to recognize that they can control local policy to make home building easier.
Ruder suggested that future home buyers look at what’s currently on the market as a potential solution to anticipated rising costs.
“If you are looking for some stability or at least known cost, what is out there today from the speculative environment, something that was built prior to a buyer being identified is probably a way to hedge against some of those future disruptions,” he said.
The Housing Market Index is a monthly survey tracked by NAHB/Wells Fargo and can be found here.
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