Skip to main content

Economists' Outlook

Housing stats and analysis from NAR's research experts.

Contracts That Closed in January 2016 Typically Took 42 Days to Close

March 9, 2016
TRID (TILA-RESPA Integrated Disclosure), Legal, Closing, Transaction Procedures & Fees, Real Estate Settlement Procedures Act (RESPA)
By: Scholastica (Gay) Cororaton

In a monthly survey, the National Association of REALTORS® asks REALTOR® respondents how many days it took to close their most recent contract that closed in January 2016. The median days to close a contract was 42 days, up from 36 days in July 2015 when NAR first started tracking this information, according to the January 2016 REALTORS® Confidence Index Survey Report. The average number of days to close a contract also rose to 46 days from 41 days in July 2015.[1]

days to close
The survey also asks the respondents if they observed a longer closed period compared to a year ago. Nearly half of respondents reported a longer closing period compared to a year ago.
longer closing
Reports about TRID are mixed: there are reports that “TRID is causing delays” and “making transactions difficult,” but there are also reports that TRID has been “fairly easy to deal with” and that the TRID rules “aren’t a major problem”.[2] Respondents have reported writing 45-day closing periods in their contracts to take into account the TRID timelines.

Delays due to financing are the biggest cause of recent delays. Among contracts that had a delayed settlement in the period November 2015‒January 2016 (32 percent of contracts), 40 percent had financing issues.

problems encountered

 [1] The median is the number (of days) such that half of the respondents reported a lower number and half of the respondents reported a higher number. It is less susceptible to extreme values than the average (mean). A higher average (mean) compared to the median indicates the presence of data at the upper range that skews the distribution of observations to the right and that pulls up the average(mean) compared to the median which is the middle value.  

[2] The TILA‒RESPA Integrated Disclosure (TRID) regulations which came into effect on October 3, 2015 were intended to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage for which they are applying. Toward this end, the new guidelines prescribe timelines when consumers should receive the Loan Estimate and the Closing Disclosure. The creditor should deliver the Loan Estimate or place it in the mail no later than the third business day after receiving the loan application. The creditor is required to ensure that the consumer receives the Closing Disclosure no later than three business days before the consummation of the loan. If the creditor provides a new Closing Disclosure, the consumer must be provided with another three-business day waiting period. Guidelines at http://files.consumerfinance.gov/f/201508_cfpb_tila-respa-integrated-dis....

 

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.
Search Economists' Outlook

Advertisement