- According to Campbell/Inside Mortgage Finance data, 15.6 percent of delayed closings were due to appraisal issues -- a 50 percentage point jump from April.
- Survey respondents noted that slowed appraisals were due to the lack of appraisers amidst an abundance of inventory under contract.
Have you noticed a sudden shift in the amount of time it takes a house to get to close?
It’s not your imagination: New data from Campbell/Inside Mortgage Finance indicates that the share of home purchases that closed on time has declined recently.
What’s going on? According to Campbell, many real estate agents are “pointing to delays caused by slow appraisals.”
In April, 76.6 percent of purchases with a low down payment-mortgage guaranteed by Fannie Mae or Freddie Mac closed on time, based on a three-month moving average. In August, that number was 63.3 percent and had been declining for four consecutive months.
“Other loan types have shown similar trends,” said Campbell in a press release. “In August, 59.2 percent of home purchases with an FHA mortgage closed on time, down from a 65.6 percent share in April.”
However, this trend isn’t being seen with cash purchases — 79.1 percent of cash purchases closed on time in August, an increase from 77.2 percent in April.
This supports the theory that appraisals are the pain point, as cash transactions are less reliant on appraisals to close. In April, appraisal issues caused 10.7 percent of delayed closings. This number increased by almost 50 percentage points to 15.6 percent in August.
“Many real estate agents participating in the HousingPulse survey said they have seen difficulties getting appraisals scheduled, prompting closing delays of up to a month in some instances,” said Campbell in a release.
“Appraisals are taking more time due to a large inventory under contract and a lack of appraisers,” said a Colorado agent in the release.
Fannie Mae and Freddie Mac mortgages with private mortgage insurance took 17.0 extra days to close on average in August, and FHA mortgages took an extra 18.6 days to close.
This monthly survey queries approximately 2,000 real estate agents nationwide every month about home sales and mortgage usage patterns.