With the economy and housing markets turning around, we’ve seen the title industry pick up considerably and project continued recovery over the next couple of years.
According to a number of recent reports, the U.S. is entering another “housing boom,” and increased home sales and construction have experts optimistic about the industry. New homeowners, who are taking advantage of record low interest rates and reduced property prices, are fueling what some analysts predict will be a 20-30 percent growth over the next four to five years. Ultimately, this growth will generate considerable business for title agencies as they work to ensure smooth transactions.
In addition to the new homeowners entering the market, there’s been an enormous increase in refinancing among those who bought when rates were higher and are now taking advantage of lower interest rates. In many cases, they’re saving thousands of dollars each year on their mortgages, lowering their monthly payments and changing the length of their mortgages. This healthy bump in refinancing has kept title agents busy, and we expect this trend to continue with the help of the Federal Reserve.
The Fed recently announced a plan to buy $40 billion in mortgage-backed securities each month in an effort to ease costs for homeowners and buyers until the economy has improved. This policy of quantitative easing has the Fed buying bonds that are backed by housing mortgages. In addition, the Fed also announced that it plans to keep short-term interest rates at low levels until mid-2015. These activities will keep mortgage rates down, giving title agencies the opportunity to grow and increase sales.
We are embracing the influx of business and are opening offices to service this business growth, from South Florida to California—markets where the industry was hit the hardest. New and existing offices alike should embrace these low interest rates that will help revive markets that have declined in the past months and look forward to strong growth.