Closing times drop back to pre-pandemic levels as spring buying starts

In March, the average number of days it took to close a home buyer loan declined after such timelines expanded over the previous three months.

Closing times for purchase mortgages dropped to 51 days last month from 53 days in February, matching an annual high seen in December 2019, ICE Mortgage Technology found in a report released Tuesday.

The compression allays fears that lenders would have difficulty serving the needs of borrowers with time-sensitive purchase contracts during a peak season.

“We’re seeing a compelling reduction in the time to close a mortgage as we continue into 2021,” said Joe Tyrrell, president of ICE Mortgage Technology, in a press release.

Home purchase timelines do tend to lengthen in the winter months, but the average number of days it took to close loans was exceptionally high between December 2020 and February of this year, peaking at 57 days in January. Closing times are still slightly higher than they were when the pandemic was first spreading in March of last year. The average closing time for a purchase loan at that time was 45 days.

In addition to typical seasonality, slow but increasing mortgage industry adoption of loan-closing technology, and increased reliance on purchase lending as refinancing has ebbed likely played a role in compressing timelines.

Statistics related to how prevalent home buyer loans have become in the market generally agree there’s been an uptick. Among borrowers whose loans were processed on ICE Mortgage Technology’s origination system, 36% took out financing for purchases, up from 32% the previous month but down from 45% in March 2020. Other estimates for the purchase share in March have been as high as 52%.