I guess one of the benefits of a limited inventory is loans can close faster. For the fourth consecutive month, closing times have decreased, according to the latest data from ICE Mortgage Technology (ICE)
- M-O-M: The average time to close dropped to 51 days which is a 1.9% drop from the previous month.
- Y-O-Y: The 51 day average is unfortunately much higher than a year ago when loans closed in an average of 42 days. That’s a 21.4% increase.
For those worried that lending standards might drop (I’m looking at you crash bros) have no fear. Lending standards have remained solid with the average closing loan having a credit score of 747, an LTV of 72%, and a DTI of 23/35.
On another positive note, closing rates increased to 78%. This is the highest rate since March 2020 and was the 3rd month in a row that we saw an increase.
Joe Tyrrell, president of ICE Mortgage Technology, attributes that reduced closing time to technologic adoptions in the industry. “The decrease in average time to close is not surprising, given the increase we have observed in the adoption of digital transformation tools, such as AIQ, our artificial intelligence offering that automates workflows for shifting to a more data-driven process, and consumer engagement suite for automating communication to all parties in the transaction,”