CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 30, 2018 10:53 AM (EDT)
In this episode of A.M.BestTV, Meg Mulry, associate director, and David Blades, senior research analyst, both of A.M. Best, said that a review of the U.S. title insurance sector has revealed a slowing of growth and profitability. Click on http://www.ambest.com/v.asp?v=title1118 to view the entire program.
Slower real estate activity, due partially to rising housing costs, is also having a negative impact on the title sector.
“Higher home prices and the increase in the 30-year mortgage rate definitely have tempered the amount and rate of growth,” said Blades. “Also, the rise in mortgage rates has had a negative impact on refinancing. All of these factors are tempering the overall rate of growth, which has caused direct premium to remain static.”
Mulry addressed the impact of millennial home buyers on the real estate market.
“Millennials are actually having a harder time getting into the housing market, mainly due to price appreciation,” she said. “It is harder now to save the money to use as a down payment, as well as cope with the rising interest rates. As the 30-year mortgage rates continue to increase, the price of home ownership will become more expensive.”
She also highlighted student debt as another hurdle. “Student debt in the United States in the second quarter of 2018 was over $1.4 trillion, and that is three times higher than it was before the housing bust,” she said. “Consequently, price depreciation, higher interest rates and debt service are all contributing to the challenges the millennial generation has in entering the housing market.”
Despite these market headwinds, Blades and Mulry said title insurance has been stable from A.M. Best’s perspective.
To access a copy of this market segment report, titled, “Title Segment Operating Results Remain Strong Amid Winds of Change,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=278787 .
Recent episodes of A.M.BestTV include:
A.M.BestTV covers exclusive A.M. Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html . View A.M.BestTV episodes at http://www.ambest.tv .
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.