Combining two reports – a listing average from the National Association of Realtors® (NAR) and a days-to-closing by Ellie Mae, the average time it takes for a home to go from first day on the market to the closing table is 73 days.
Forty-eight percent of homes sold in March were on the market for less than a month, according to NAR. The average for all sold properties, though, was a little higher, at 34 days. Still, that’s down significantly from 47 days a year ago. Non-distressed homes spent a median of 32 days on the market, which is the shortest length of time since NAR began tracking the data in May 2011.
With strong buyer demand supporting shorter times on the market, home prices are rising as well. The median existing-home price for all housing types was $236,400 in March, up 6.8 percent from a year ago.
“Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes,” says NAR Chief Economist Lawrence Yun. “A growing pool of all types of buyers is competing for the lackluster amount of existing homes on the market. Until we see significant and sustained multi-month increases in housing starts, prices will continue to far outpace incomes and put pressure on those trying to buy.”
Days to closing
The average time to close on all home loan types dropped to 43 days in March – the quickest pace since February 2015, according to Ellie Mae’s Origination Insight Report. A year ago, the average closing time was 46 days. Broken out, loans to purchase a home took 43 days to close, and refinance loans took 43 days in March, down from 45 and 47 days, respectively, month to month.
The share of purchase loans last month rose to 63 percent of total originations, up from 57 percent in February, according to Ellie Mae’s report. That marks their highest share since July 2016.
“The purchase market continued to heat up in March,” says Ellie Mae President and CEO Jonathan Corr. He also attributed the drop in closing times to Ellie Mae lenders who are automating more mortgage processes “to improve efficiency, quality, and compliance.”
More borrowers are opting for adjustable-rate mortgages as well, according to Ellie Mae’s report. ARMs increased from 5.3 percent to 5.6 percent in March, which is the highest percentage in three years.
Source: “Lenders Speed Up Loan Processing: Ellie Mae,” Mortgage News Daily (April 21, 2017); National Association of Realtors® (NAR)
© Copyright 2017 INFORMATION, INC. Bethesda, MD (301) 215-4688