The One-Time Close Construction Loan Industry 2024: Predictions
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A commercial real estate company called JLL released a forecast for 2024. JFF made predictions about the state of the construction industry, some of which could mean good things for those planning a construction project financed by a One-Time Close mortgage.
JLL predicts 2024 could be a busy year, with some costs going down. Other costs may increase modestly, as we will discover below.
Construction Costs In 2024
Some market watchers (with the benefit of hindsight) declared 2023 the year that the construction industry “stabilzed” post-COVID. 2023 was also the year markets benefitted from easing supply chain issues related to the global pandemic.
JLL predicts more price stability for raw materials used to build homes in 2024 but that does not mean prices will drop. In fact, some modest price increases could take effect depending on the raw materials needed.
JLL predicts 2024 cost increases for raw materials could hit 4% in many cases. Some building materials and components are more expensive than others; electrical supplies may cost up to 6% more in the new year.
Construction Loan Labor Issues Shortage?
A 2024 labor shortage may complicate housing market recovery. JLL notes that in 2024, construction project hiring is an issue that hasn't vexed borrowers so much in past years. “Labor shortages are expected to persist, and construction wages will increase to stay competitive, probably in the 3 percent to 5 percent range.”
Supply chain issues may have taken a turn for the better, but will the amount of available labor also improve? In the mid-term, that may not be a realistic expectation.
JLL predicts limited labor resources are likely to be an ongoing problem. One that could slow but not derail market recovery.
Time Is Of The Essence
Will typical One-Time Close borrowers need to build in more time to save and plan their loan? Yes, and you may find more time is required to find builders for your construction project.
Lower costs won't do much to offset the problems created by labor shortages. It could require more time to complete the project. Taking that extra time is worth it for many.
Want More Information About One-Time Close Loans?
We have extensively researched the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs.
We have spoken directly to licensed lenders that originate these residential loan types in most states, and each company has supplied us with the guidelines for their products. We can connect you with mortgage loan officers who work for lenders who know the product well and have consistently provided quality service.
If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.
OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher-quality service.
We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allow for single-family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes).
In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.
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1. Send your first and last name, e-mail address, and contact telephone number.
2. Tell us the city and state of the proposed property.
3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639), or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
4. Are you or your spouse (Co-borrower) eligible veterans? If either of you is an eligible veteran, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines.
Most VA lenders will go up to $1,500,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
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