While California’s job growth and economy continue to improve, major hurdles remain for housing’s recovery. Firstly, affordability is a huge concern as rapid home price increases, mixed with a lack of affordable inventory is leaving little room for first-time borrowers to jump into the market. Tight credit and stagnant incomes are another concern if prices remain high.
During July, housing construction hit its highest level in eight months as the sector shows signs of picking up pace in the second half of the year. After two months of drops, construction jumped 15.7 percent last month to a seasonally adjusted annual rate of 1.09 million homes, the fastest pace since the 1.11 million posted in November, according to the Commerce Department.