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Title Agents Bullish on Buys and Refis

bubbleTitle agents are significantly more optimistic in Q2 than last quarter about the volume of both purchase and refinance transactions in the year ahead, according to First American Financial Corporation. The company’s latest Real Estate Sentiment Index (RESI) found that title agent expectations for growth in purchase and refinance transactions across all property types in the year ahead are 17.3 percent more positive than they were during the first quarter, owing much to reduced expectations for mortgage rate increases this year.

Title agents are, however, predicting 4 percent price growth real estate prices over the next 12 months, which is a slight drop from the first-quarter prediction of 4.6 percent annualized price growth, the report stated.

“The outlook for refinance transaction volume among title agents is modestly positive, but much less so than for purchase volume,” said Mark Fleming, chief economist at First American. “However, this modestly bullish outlook is a significant change from the previous quarter, when title agents said they expected refinance volume to go down, possibly due to a reduced expectation of higher mortgage interest rates in the coming year.”

Fleming also said that while expectations for price growth across all property types is cooling, title agents feel more confident about residential property price growth than they did in the first quarter, with that confidence increasing 18 percent.

“State by state, title agents remained strongly positive regarding residential price increases, with the exception of agents in New Mexico, who expect declining prices,” he said.

According to the RESI, the five states with the highest predictions for residential price increases in the coming year are: Tennessee, Kentucky, Idaho, Wisconsin, and Utah. For multi-family, the top five were Kentucky, Rhode Island, Florida, Idaho, and Tennessee.

Fewer title agents also reported believing that the Consumer Finance Protection Bureau’s “Know Before You Owe” rules will cause delays and extra costs in closings.

“The independent title agents surveyed feel that consumer understanding of the closing process is gradually improving,” said Fleming. “While sentiment regarding this remains negative, there was a 74.7 percent improvement over the past quarter in how well title agents believe consumers’ understanding of the closing has improved due to Know-Before-You-Owe.”

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.
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