Let me walk you through what Realtor.com Research is seeing in the national new construction market, because there are some important takeaways here that affect how we think about inventory and pricing in our region.
The June numbers show a mixed picture across permitting, completions, and starts. According to Realtor.com Research, permits for new housing units declined slightly month over month and year over year, while completions actually ticked up a bit. Here's where it gets interesting though: new construction starts jumped significantly, but that surge came entirely from multifamily projects rather than single family homes. In fact, single family starts actually weakened compared to the prior month and year.
The researchers note something unusual happened with multifamily construction that's worth paying attention to. The May figures came in quite low, then June saw a dramatic spike upward. This kind of swing is unusual enough that it may take several months of data before we really understand what's driving the multifamily market right now and where it's actually headed.
When you look at regional patterns, different parts of the country are completing different types of inventory. The Northeast is finishing a lot of multifamily projects while single family completions there have actually declined year over year. The South, meanwhile, is seeing strength in single family completions even as multifamily activity softens. This mismatch matters because in places like the Northeast and Midwest where folks really need new homes, single family completions are actually falling.
Looking forward, builder confidence remains low across the country. According to Realtor.com Research, construction costs keep rising while demand for new homes hasn't been as strong as builders hoped, making them hesitant to start new projects. The permitting slowdown we're seeing suggests builders don't expect this situation to change anytime soon. Without a real pickup in homebuilding, the country faces a significant ongoing shortage of housing inventory.
What I am seeing locally is that this national dynamic creates both challenges and opportunities for our Bay Area market. Our permitting challenges in places like Fremont and across the East Bay mean that the structural shortage of housing that's keeping prices elevated nationally will likely persist in our region too, which continues to pressure affordability for buyers.
