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Housing economist tells committee tight inventory, not mortgage rates, is driving Kansas affordability concerns
Summary
Dr. Stanley Longhofer told the committee that mortgage rates around 6% are in a normal historical range, but Kansas faces a persistent shortage of homes and low new-construction levels. He urged policies to increase supply and reduce local permitting delays to lower costs.
Dr. Stanley Longhofer, consulting economist with Kansas Realtors and a Wichita State University professor, briefed the Committee on Commerce, Labor and Economic Development on housing affordability in Kansas.
Longhofer explained the National Association of Realtors’ housing-affordability index and said current 30-year fixed mortgage rates in the low-6% range are consistent with long-run norms; he cautioned that expecting substantially lower mortgage rates would likely reflect unusual Federal Reserve intervention. Instead, he pointed to a supply-driven problem in Kansas: the state has been below a balanced four- to six-month supply of homes for a prolonged period and remains significantly tighter than the U.S. average. He said inventories fell sharply during COVID and, although they have improved, Kansas still had roughly 7,500 homes on the market (versus about 10,000 before COVID) as of the figures he presented.
Longhofer warned new-home construction remains well below pre-2008 levels and that the backlog of unbuilt move-up homes (middle-market housing) contributes to upward pressure on prices. He noted construction-material costs and labor have risen about 50% over the last decade while existing-home prices roughly doubled, and he identified land, infrastructure and regulatory costs as the remaining major drivers preventing builders from producing lower-priced move-up homes.
Committee members asked about regulatory costs and practical steps to ease the burden. Longhofer said greater predictability in permitting timelines and reduced unnecessary local regulatory burdens would lower holding and financing costs for builders, which would help increase supply and improve affordability over time.
What comes next: Longhofer invited follow-up questions and the committee indicated interest in further discussion; no committee action on legislation was taken at the conclusion of the hearing.
