Home sales drop sharply in November - is this due to lender delays??

Home sales drop sharply in November as closing process lengthens

Nathan Bomey, USA TODAY 11:09 a.m. EST December 22, 2015

Sales of existing homes fell sharply in November, but prices rose and a change in federal closing rules may be to blame for the drop-off.
The rate of existing-home sales fell to its lowest pace in 19 months, according to the National Association of Realtors. Sales fell 10.5% on a seasonally adjusted basis to an annualized rate of 4.76 million, compared to 5.32 million in October.
But median sale prices for single-family homes, townhouses, condominiums and co-ops rose 6.3% to $220,300, compared to the same period a year earlier.
National Association of Realtors chief economist Lawrence Yun said the drop-off in the sales rate may be attributable to a new federal process called Know Before You Owe, which he said has lengthened closing times.
The monthly survey showed that 47% of agents are reporting an increase in closing times, compared to 37% who were reporting an uptick a year earlier.
"It's possible the longer timeframes pushed a latter portion of would-be November transactions into December," Yun said in a statement. "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."
The Consumer Financial Protection Bureau imposed the Know Before You Owe rule effective Aug. 1, requiring new disclosures and procedures to help buyers grasp the details of their mortgages and compare rates.
Lenders were expected to make changes to internal systems that could at least temporarily lengthen closing processes, according to PricewaterhouseCoopers.
One encouraging sign for the housing market was that the average property stayed on the market for 54 days before selling in November, compared to 57 in October and 65 a year earlier.
The average 30-year, fixed-rate mortgage rose from 3.8% to 3.94% in October. NAR economists expect the Federal Reserve's move to increase interest rates to push the rate up to 4.5% by the end of 2016.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.