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November and December's Home Sales Affected by TRID


About four months ago, the TILA-RESPA Integrated Disclosure rule changed the mortgage process for lenders and borrowers alike. The rule consolidated four forms into two: the loan estimate and the closing disclosure. It also implemented a timeline for each of these forms.

The changes were significant and many lenders had concerns regarding the best ways to prepare for compliance and training staff. The timeline also had some industry experts worried about how it would affect borrowers.

November Sales Slide

All eyes were on the real estate market, with questions about how TRID would affect home sales, when the rule went into effect on Oct. 3. The following month showed a dip in sales, according to the National Association of Realtors. November had the slowest home sales rate in 19 months and total existing home sales fell 10.5 percent.1

Sales weren't only lowered in comparison to the month previous, but also to the November prior. On a year-over-year basis, November was down 3.8 percent. After a great year for the housing market, this was the first instance of a year-over-year decrease since September 2014.

Lawrence Yun, chief economist for the NAR, explained many things could have had an impact on the depressed November sales, including low inventory levels and rising home prices. However, it's also likely the implementation of TRID had an effect on the market.

"It's possible the longer timeframes pushed a latter portion of would-be November transactions into December," Yun said. "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 rule didn't only affect the national housing market, but local ones as well. According to the California Association of Realtors, the rule's implementation delayed some closings and contributed to a statewide decrease in home sales, which fell below 400,000 for the first time since March, 2015.2

December Sales Bounce Back

However, other states noted higher sales in November, though it was still acknowledged that the rule could have delayed some transactions, according to Florida Realtors.

Yun's prediction of November's low home sales being uncharacteristic of 2015 proved to be true the following month. In fact, December saw the largest month-over-month increase ever recorded, at 14.7 percent, the NAR said.3 Sales in December were also 7.7 percent ahead of what they were one year previous.

California saw similar effects, with an increase of 9.6 percent compared to November and a year-over-year rise of 10.7 percent.4

"As we speculated, sales that were delayed in November because of The Consumer Financial Protection Bureau's new loan disclosure rules closed in December instead, which led to the greatest monthly sales increase in nearly five years," Ziggy Zicarelli, president of CAR, explained. "Sales increased across the board in all price segments in December, but improvement in the sub-$500,000 market was more pronounced as many homes affected by the new loan disclosures were priced under the conforming loan limit."

All in all, December's impressive rise is reflective of the strides the housing market took in 2015 as a whole. Last year saw the most existing home sales since 2006, with 5.26 million sales total.

Other Considerations

Although many have watched to see how TRID would affect the housing market, other factors were at play in December as well. The Federal Reserve rose the interest rate for the first time since it was lowered to near zero in 2008. Though the boost was small, the Fed is expected to increase it periodically in the coming year.

The increase in interest rates did not have much of an effect on current mortgage rates, but could have inspired some homeowners to sell while rates are still at historic lows, Yun speculated. Andrew Barbar, the 2015 Florida Realtors' president, shared a similar sentiment.

"We don't expect that (December's) decision by the Federal Reserve to slightly raise the federal funds rate will have a significant adverse impact on the housing market, as rates remain historically low," Barbar said. "The increase was long anticipated, and it may even encourage homebuyers who had been waiting on the sidelines to enter the market now."


1 National Association of Realtors
2 California Association of Realtors
3 National Association of Realtors
4 California Association of Realtors

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