Delays in the time-to-close, the time from when a listing goes under contract to settlement of the deal, rose for the second consecutive month. Delays are measured by comparing the time-to-close this year with the same time frame a year earlier so as to eliminate seasonality. The average delay in time-to-close rose from 3.0 days in July to 3.9 days in August. This is the highest level of delays since January.
Compared to last year, the share of contracts closing in fewer than 30 days fell from 29.7 percent to 20.9 percent. The largest shift was to the portion of the market that takes greater than 45 days to settle, which rose from 36.4 percent to 43.7 percent.
While the jump in delays in late 2015 and lingering effects through the spring and summer were due to TRID, more recent increases are likely Brexit related. The sharp drop in mortgage rates boosted refinancing activity which taxed lenders’ ability to process transactions. Appraisal related delays may have played a role as anecdotes of limited qualified appraisers in the face of high application volume caused delays. Brexit and volume related delays will likely ebb in the weeks and months ahead leaving a better picture of the lingering regulatory-related delays the impact of the CFPB’s recent efforts to ameliorate them.
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