Existing-home sales plummeted in November confirming fears in the mortgage industry that a new consumer disclosure rule is delaying mortgage closings.
Existing home sales fell 10.5% in November from a month earlier, to a seasonally adjusted annual rate of 4.76 million homes, the National Association of Realtors said Tuesday. It was the slowest month for home sales since April 2014 and followed a 3.4% decline in October.
Lawrence Yun, the Realtors' group's chief economist, attributed the stark drop-off in demand, in part, to the Consumer Financial Protection Bureau's disclosure rules, known as "Know Before You Owe" or TRID, for Truth-in-Lending Act and Real Estate Settlement Procedures Act integrated disclosures. The new borrower disclosure forms have resulted in longer time frames to close a loan, pushing some transactions from November into December, Yun said.
Sparse inventory and increasingly higher asking prices are also contributing to the weakening demand, Yun added. Existing home sales fell 3.8% in November from a year earlier, the first year-over-year decline since September 2014.