California Homebuilding Slows as Costs Rise and Financing Tightens

California's home construction has slowed dramatically due to rising costs and difficult financing. Building permits are down 7% in 2023.

Developers face challenges like higher labor and materials costs, strict regulations, and rising interest rates that make projects less viable.

Single-family home construction shows signs of recovery, but multifamily permits continue to decline due to limited financing options.

In Los Angeles, a new mansion tax adds to developers' financial burdens.

Despite recent reforms to streamline approvals, developers remain cautious due to market uncertainty and high costs. Landowners resist dropping prices.