Existing-home sales plummeted in November, confirming fears in the mortgage industry that a new consumer disclosure rule is delaying mortgage closings.
Sales of existing homes 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 Realtor 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. Sales of existing homes fell 3.8% in November from a year earlier, the first year-over-year decline since September 2014.