Title Abstract and Settlement Offices
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 6,800 title abstract and settlement offices in the US coordinate and conduct activities necessary to transfer ownership of real estate. Firms may charge fees for title searches, surveys, tax certificates, legal services, escrow, filing, recording, documentation, and delivery. Firms also earn commissions as an agent for a title insurance provider.
Dependence On Third Parties
For most real estate transactions, a third party, such as a real estate agent, builder, or mortgage banker, recommends a title company.
Government Regulation
The complexities of real estate transactions and potential for service providers to commit fraudulent or unethical acts have led to government regulations to protect buyers and sellers.
Industry size & Structure
The average title abstract and settlement office operates out of a single location, employs 9 workers, and generates $1.4 million annually.
- The title abstract and settlement industry consists of about 6,800 companies that employ about 62,500 workers and generate about $9.5 billion annually.
- The industry is fragmented; the top 50 firms account for 39% of industry sales.
- The industry includes real estate settlement offices, title abstract companies, and title search companies.
- Some large title insurance companies, such as Fidelity National Financial and Stewart Information Services, are vertically-integrated, and provide titling services in addition to insurance policies.
Industry Forecast
Title Abstract and Settlement Offices Industry Growth
Recent Developments
Feb 22, 2023 - Mortgage Applications for New Homes Rise
- Seasonal patterns and moderating mortgage rates improved demand for new home purchases in January. US mortgage applications for new home purchases fell 3.5% in January to a year earlier, according to the Mortgage Bankers Association (MBA). However, new home mortgage applications rose 42% from December. The MBA’s Chief Economist said, “The 30-year fixed rate declined almost 40 basis points over the month, and this stirred some homebuyers to act, especially those who might have delayed their purchase when mortgage rates were higher.” The MBA suggested home builders may have offered more robust incentives to spur sales after the slowdown in 2022.
- Sales of existing US homes fell 0.7% in January from December and were down 36.9% year over year, according to the National Association of Realtors (NAR). January marked the twelfth consecutive monthly drop as rising interest rates slow home sales. NAR chief economist Lawrence Yun said, “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.” Yun added, “Inventory remains low, but buyers are beginning to have better negotiating power. Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
- While supply-side issues like labor and materials shortages were among home builders’ primary concerns in 2021 and 2022, attracting buyers is expected to become more of a problem in 2023, according to a recent survey by the National Association of Home Builders (NAHB). In 2022, 55% of home builders felt adverse media reports were making buyers more cautious, but 79% feel that way for 2023. In 2022, 49% of home builders felt prospective buyers believed home prices or interest rates would drop if they waited, while 80% of home builders expect buyers to have a wait-and-see approach in 2023. Just over 40% of home builders were concerned about the employment and economic situation in 2022, but 73% expect to be concerned about these issues in 2023.
- Total US commercial and multifamily lending is forecast to drop to $684 billion in 2023, down 15% from the 2022 total of $804 billion, according to a recent report by the Mortgage Bankers Association (MBA). Multifamily lending is expected to fall 16% in 2023 to $384 billion. The MBA’s Head of Commercial Real Estate Research, Jamie Woodwell, said, “MBA’s updated forecast is built on a base case of economic weakness at the start of 2023 with a moderation in interest rates and an overall improvement in the economy as the year goes on.” Combined multifamily and commercial lending is expected to return to growth in 2024 and reach $906 billion.
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