New construction for both single-family and multifamily units ramped up sizably in July, up 23% from one year ago, and almost matching pre-pandemic activity in the first quarter. Such growth is needed to steadily relieve the housing shortage. This kind of growth is also a major contributor to local economic recovery.

The rise of multifamily units may lead to an oversupply of apartment buildings, especially in city centers given the evident recent shift in consumer preference for single-family homes in the suburbs. Apartment rent growth could therefore be tough going ahead. The rise of single-family units is welcome, as overall inventory of homes for sale are down by 19% from one year ago and there is intense buyer competition in the market as a result. But new home construction is not rising in the West region where the inventory shortage is most acute. Overall, the numbers are good although many more months of such trends are needed. Expect inventory shortages for the remainder of the year and just maybe some semblance of a balanced market in 2021.