by Bowdeya Tweh, email@example.com 6:02 p.m. EDT June 3, 2016
Home building activity is strengthening in the Cincinnati region, but an official from a national trade group said the "3 Ls" of land, labor and lending still pose problems for the real estate sector.
Gerald Howard, president and CEO of the National Association of Home Builders, visited the region Thursday as part of a forum hosted by regional home building groups for their members. The trade group's more than 140,000 members are responsible for building 80 percent of new single-family and multifamily homes in the United States annually.
"Both single and multifamily permits are well up compared to last year, showing that in the homebuilding economy, things are very strong here," Howard said. "(But) the market is still constrained. First-time buyers are having trouble getting credit, loosening that up could help production. Interest rates are still favorable."
Howard said lot availability has become a major concern because few developers were creating lots to build upon during the recession. As the credit crunch thawed and the real estate market recovered, it left a situation where builders wanted to be active, but there weren't enough ready-to-build sites in markets around the country.
Identifying skilled labor also is a big concern in the real estate community, Howard said. The Home Builders Association of Northern Kentucky’s Enzweiler Building Institute operates one of the longest-running privately owned trade schools in the country to help people acquire skills such as carpentry, plumbing, masonry, heating ventilation and air conditioning, welding and electrical work.
May was the fourth month in a row that an index reflecting home builders' sentiments about the economy registered a level of 58. Any number more than 50 on the NAHB/Wells Fargo National Housing Market Index indicates that more builders view conditions as good than poor. The recent peak was October 2015, when the index was at 65.
In 2016, Howard said the industry expects to return to 1 million housing starts, which he described as a "solid number." To put that in perspective, the industry was at about 2.2 million starts during the height of the housing boom and about 400,000 in the depths of the Great Recession.