Monthly Archives: December 2016

What time to close a loan

Ellie Mae’s report, which is pulled from a “robust” sampling of approximately 75% of all mortgage applications that were initiated on Ellie Mae’s Encompass system, typically shows a variance in the time to close for refinance mortgages versus purchase mortgages, but it appears that gap is calming down as well.

The industry became hyper focused on the time it takes to close a loan after the implementation of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosure rule last year, since the rule was expected to drastically impact and delay the closing process.

To put it in perspective, before the rule went into effect on Oct. 3, 2015, it took 47 days to close a loan in August 2015, 46 in September 2015 and 46 in October 2015.

In the following month, right after TRID took effect, the time to close shot up to 49 days, reaching a yearly high in January 2016 of 50 days.

But this didn’t last long, and come February 2016, the time was already back down to 46 and even went as low as 44 days in March and April.

And finally, by September 2016, it started to look like the time to close a loan settled at 46 days.

That is, until this latest report. After August, the time started to edge higher again, reaching 48 days in September and October and then 49 in this latest November report.

The chart below showcases all of the above data.

What do you know about Affordability at worst point

Home prices increased once again in November by 6.8% as housing inventory dropped 8%, making affordability that much worse, according to the existing home sales report from the National Association of Realtors.

The report analyzed median home prices derived from publicly recorded sales deed data collected by ATTOM and average wage data from the U.S. Bureau of Labor Statistics in 447 U.S. counties with a combined population of more than 184 million. The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3% down payment — including property taxes and insurance.

An index of 100 indicates market affordability on par with historical norms while above 100 indicates more affordable than historic norms and below 100 indicates less affordable than historic norms.

Affordability decreased in the fourth quarter, but remained above the 100 mark at 103, down from 108 last quarter and 116 last year.

“Rapid home-price appreciation and tepid wage growth have combined to erode home affordability during this housing recovery, and the recent uptick in mortgage rates only accelerated that trend in the fourth quarter,” ATTOM Senior Vice President Daren Blomquist said.

“The prospect of further interest rate hikes in 2017 will likely cause further deterioration of home affordability next year,” Blomquist said. “Absent a strong resurgence in wage growth, that will put downward pressure on home price appreciation in many local markets.”