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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, 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
Coronavirus Update
Apr 11, 2022 - Home Prices, Mortgage Rates Rise
- On a seasonally adjusted basis, US housing starts for single-family homes increased 6.8% in February 2022 compared to the prior month. Unadjusted single-family housing starts grew 7.3% in the first two months of 2022 compared to the same period in 2021.
- The decrease in US domestic migration during the coronavirus pandemic impacted cities, suburbs, and rural areas, according to a Pew Research Center analysis that compared data for movers in 2020 with data for movers in 2016 through 2018. The pandemic year of 2020 continued the same pre-pandemic pattern of net migration gain or loss for cities and suburban areas. More people moved out of US cities than moved into them, while suburbs had more people moving in from other US communities than out. The net flow for rural areas did not indicate strong movement in either direction from 2016 through 2018, while more people moved out of rural areas than moved into them in 2020.
- Single-family home rental rates continue increasing in early 2022, but home prices are rising faster than rents, which is shrinking the affordability gap between being a homeowner and a tenant, according to real estate data tracking firm ATTOM. Single-family rents increased 12.6% in January 2022 compared to the year-earlier period, marking the tenth consecutive record high, according to CoreLogic. Owning the median-priced home is more affordable than the average rent on a three-bedroom home in 58% of the nation, according to ATTOM, which factored in all the expenses of owning, including the monthly mortgage payment, property taxes, and homeowners’ insurance. Much of this affordability is due to the historically low mortgage rates of the past few years. However, rates are beginning to rise as financial markets anticipate tighter monetary policy. For the week ended April 1, 2022, the 30-year fixed mortgage rate reached a three-year high of 4.9%, according to the Mortgage Bankers Association (MBA).
- According to the National Association of Realtors (NAR), sales of previously-owned homes fell 7.2% month over month and 2.4% year over year in February 2022. The median existing-home price for all housing types increased 15% year over year to $357,300. "Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases," said Lawrence Yun, NAR's chief economist. "Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”
- Cities including Madison, WI, Fort Myers, FL, Greenville, SC, and Columbus, OH, are likely to be among the biggest beneficiaries of pandemic-related relocations, according to The Wall Street Journal. These communities will benefit from affordable housing, ample access to outdoor space, less congestion, and a mix of high-tech and old-line jobs in industries like manufacturing and finance. Provo, UT, and Des Moines, IA, are also likely to benefit from pandemic-related relocations.
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