Metrowide housing starts jumped upward for the second straight month in May and posted the best monthly activity in six months, according to statistics compiled by the Home Builders Association of Greater Kansas City.

The association reported a seasonally adjusted total of 188 single-family homes permitted in May, up 25 percent from the revised total of 151 homes permitted in April.

While the new home permit numbers remain well off the pace set during the housing boom, May’s totals offer a healthy dose of enthusiasm for the homebuilding industry looking for an indication that the market has reached bottom and is showing signs of recovery.

Since reaching a low of 110 units in March, adjusted single-family totals have soared 71 percent in the last two months. Compared to the same time last year, housing permits were down just 14 percent in May. That is the best year-to-year performance for the new-home market since October 2007.

Association Executive Vice President/CEO Tim Underwood said in a press release these are positive indications the new home market may be moving in the right direction.

“Seeing new home starts rise as inventory is continuing to fall is a good sign that consumers are beginning to return to the housing market,” Underwood said. “The combination of low mortgage rates and the $8,000 first-time buyer tax credit appears to be making an impact in drawing attention to the opportunities available for buyers in the current housing market.”

While new home starts driven by sales under contract are up, what’s largely missing from the mix of new home permits are speculative starts, he said. These are homes started by builders for buyers looking to move more quickly than a buyer building a custom home. However, tighter lending restrictions are making it more difficult for builders to replenish the inventory of spec homes.

“We’re approaching the point where builders may miss out on new home sales because they don’t have inventory available,” Underwood said. “There must be caution and prudence in new home starts but across the country we are seeing regulators discourage successful housing projects. Restoring the flow of credit to builders and developers is critical to the housing market recovery.”