Look, according to HousingWire and data from the Census Bureau, we saw housing starts jump quite a bit in June – up roughly 19% from the month before. But here's the thing that matters when you're trying to understand what's really happening in our market: almost all of that growth came from multifamily construction, which surged about 76%. Single-family starts barely moved, staying pretty much flat compared to May. So the headline sounds better than the actual situation on the ground for folks looking to build or buy a traditional home.
The real warning sign, in my opinion, is what happened with building permits. Those actually went down in June, dropping about 3% from May. Permits are what tell us what's coming down the pipeline, so when they fall while starts are rising, that's telling us the growth we just saw might not stick around. Single-family permits also declined, which suggests builders aren't confident enough to lock in new projects right now.
According to HousingWire's reporting, economists are keeping a close eye on what's really motivating builders. One economist noted that while the numbers look decent on paper, the strength in multifamily is likely temporary. The real issue is that single-family builders still have too much inventory sitting around, and they're having to offer discounts and incentives just to move homes that are already built. When you have to cut into your margins like that, you're not going to rush out and start new projects.
The report also mentioned that homebuilder confidence overall remains negative, and builders are being cautious about taking on new work in the second half of the year. They're focused on completing homes that are already under construction rather than breaking ground on fresh developments. Until the market tightens up and they don't need those margin-crushing discounts anymore, we probably won't see the kind of building surge that federal lawmakers are hoping for.
What I am seeing locally here in the Bay Area and East Bay is that these national trends are playing out right in front of us. Our builders are in the same boat as everyone else, sitting on inventory and trying to move product. For buyers out there, this could actually create some opportunities if you're willing to negotiate, since builders are more motivated. For sellers, the picture is tougher because new inventory is still coming online, which keeps pressure on prices in a lot of neighborhoods. The key is understanding whether your specific market is more affected by the single-family slowdown or if multifamily competition is changing the character of your area.
