Mortgage lenders, expect your closing rate to decline over the next year

The closing rate for purchase mortgages recently hit a record high, but analysts at Capital Economics warn lenders that this trend is unlikely to continue. Why? Blame a slowing economy. Most often, mortgage applications are rejected because the borrower’s credit score is too low, their debt-to-income ratio is too high, or the lender does not think the house supports the purchase price. Capital Economics said the high closing rate as of late is likely related to the fact that borrower credit scores have improved and DTIs have lowered, which would make sense given the strong economy and labor market.