Title insurance premiums written during 2009 nearly held steady from 2008 after dropping significantly the previous five years, the American Land Title Association (ALTA) says.
According to results from ALTA's 2009 market share analysis, the industry reported a 4.5% decrease in title insurance premiums, falling to $9.6 billion from $10 billion in 2008. Title insurance premiums have fallen steadily since the height of the housing boom in 2005, when premiums reached a pinnacle of $16.9 billion.
‘The temporary tax incentives and Federal Reserve's efforts to keep mortgage interest rates low helped bring more consumers into the housing market and modestly rejuvenated a dilapidated housing market,’ says Kurt Pfotenhauer, CEO of ALTA. ‘While significant foreclosure activity remains a drag on overall housing prices, the incentives have benefited the title industry to some extent in 2009.’
Overall, 25 states experienced increases in year-to-year title insurance premiums. California once again generated the most premiums. The state boasted an 8.4% spike as premiums increased from $1.4 billion in 2008 to $1.5 billion last year. The next three largest markets – Texas ($1 billion, down 17.6%), Florida ($700 million, down 23.8%) and New York ($585 million, down 22.7%) – all experienced declines in premiums.
Pennsylvania, which rounds out the top five markets, reported a 9.7% increase as premiums improved from $407 million in 2008 to $446 million last year, ALTA reports.
Alaska experienced the largest increase as premiums increased 26.3% year-to-year, improving to $38 million. Other states reporting the largest increases include Wisconsin ($120 million, up 17.6%), Montana ($52 million, up 15%), Oregon ($189 million, up 14.8%) and Hawaii ($65 million, up 14.4%).
‘As indicated by these results, the profitability of the title insurance industry always has been and always will be contingent on the cyclical nature of the mortgage market,’ Pfotenhauer adds. ‘The scattered improvements illustrate real estate is an extremely local business. Each market performs differently depending on local economic conditions.’
SOURCE: American Land Title Association