As puzzling as it seems, housing starts continued to climb in June as it is following a demand in California. The new-home construction industry in California should slow down from 2005’s intense demand.
Multifamily permits are on the rise in the Los Angeles, Bay Area and Orange County. The slowdown is due to an abundant inventory of homes on the market, both under construction and completed.
Despite a softening market, new-home prices are still at an all-time high and the affordability level of homes in California is still at an all-time low. This shuts off many first-time buyers out of the market and has another ill-effect, it helps raise rentals.
