After TRID Backlog Clears, Home Sales Expected to Normalize Again
Home sales dropped drastically in November 2015, according to the National Association of Realtors. But what exactly caused the decrease? High prices? Threats of an interest rate increase? Normal holiday slowdown?
NAR reported this week that existing home sales decreased in November to an annual rate of just 4.76 million, the lowest in a year and a half. That was a 10.5 percent drop from the previous month and 3.8 percent lower than November 2014. Those are the kind of numbers that set red flags flying and sirens sounding.
A variety of reasons contributed to the November statistics. But the main root cause appears to be only a temporary impact.
The new “Know Before You Owe” mortgage rule, commonly known as the TILA-RESPA Integrated Disclosure (TRID) rule, took effect on Oct. 3. And according to the Realtors Confidence Index in November, nearly half of those surveyed said they were experiencing longer closing times as a result. This is not the case for houses that are sold for cash, as companies like We Buy Houses in Cincinnati, OH always close the deal very fast.
The good news: Homes that were scheduled to close in November simply got pushed into December.
“It’s possible the longer timeframes pushed a latter portion of would-be November transactions into December,” said Lawrence Yun, chief economist for NAR. “As long as closing timeframes don’t rise even further, it’s likely more sales will register to this month’s total, and November’s large dip will be more of an outlier.”
Photo courtesy of Stuart Miles | Freedigitalphotos.net
(Brian Bean and Timothy Hardin are Homeowner Advocates & Home Listing Specialists with The Dream Big Team at Realty ONE Group Champions in Riverside, California. They can be reached directly at Info@DreamBigRealEstate.com or 951-778-9700.)
Brian Bean and Timothy Hardin
Homeowner Advocates & Home Listing Specialists
Realty ONE Group Champions
DRE Lic #01943304
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