Title Insurers’ Crazy 2020 Year

It should come as no surprise to escrow and title officers – 2020 was an incredibly busy time for the title industry.

According to a recent report from the American Land Title Association, title insurers wrote $19.2 billion in premiums. That’s nearly a 22% increase from $15.8 billion in 2019. They do, however, predict that 2021 will slow down due to low inventory.

ALTA Chief Executive, Diane Tomb, explains, “Do not expect the same level of refinance activity this year, even though the residential purchase market appears to be holding steady as the calendar approaches to May. The true test of whether 2020 volume represents a unique event will be whether the historically low inventory of homes for sale continues into the summer.”

It seems, so far, that 2021 is still a bit hectic for buyers, sellers, agents, and lenders. The hope was that low inventory would work its way back to higher levels before the summer, but builders are still struggling to keep up with demand.

For more real estate and title news, stop by Alliance Title’s Blog.

Optimism Spikes: Buyers and Sellers and the Real estate Market

What two things have helped buyers and sellers have a bit more pep in their step when it comes to the world of real estate?

Vaccines & stimulus checks.

Fannie Mae’s Senior Vice President and Chief Economist, Doug Duncan, explains, “The significant increase in the HPSI (Home Purchase Sentiment Index) in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring home buying season began – perhaps with even more intensity this year, since 2020’s spring home buying season was limited by virus-related lock downs.”

Fannie Mae’s current HPSI’s stats are below:

  • 61% of consumers believe it’s a good time to sell – up 55% in February
  • 53% of consumers believe it’s a good time to buy – up 48% in February

It should be noted, however, that optimism on buying is lower than selling – most note the rising home prices and lack of housing supply as the main problem.

For more real estate news, check out Alliance Title’s Blog.

Mortgage Hurdles for Buyers

Your buyer might be finding it harder to obtain a home loan approval.

The Wall Street Journal has recently reported that mortgage lenders have tightened their standards. 70% of mortgages granted in 2020 went to borrowers who had a credit score of at least 760, which is up 61% in 2019. Mortgage availability went down 35% annually in 2020.

Why are lenders making it harder for potential borrowers?

Forbearance is a major fear lenders have – to receive approval for a mortgage, some borrowers have reportedly signed statements saying they have no intention of requesting forbearance after they are approved for the mortgage.

The Wall Street Journal explains, “The meteoric growth of home prices has made some lenders reluctant to take on first-time home buyers or others they view as slightly risky. Lenders who were comfortable offering mortgages of $300,000 or $320,000 to borrowers with good-but-not-great credit histories might not be willing to lend the $350,000 or more now required to buy the same property.”

How can your buyer up the odds for their lender to approve a loan?

Shop Early

Make sure you insist that your clients begin shopping for lenders as soon as possible. Shopping around from three to four different lenders before even meeting an agent will give your buyer a better idea of what they can borrow.

Understanding and Improving Credit Scores

Here are the scores lenders look at and categorize:

Perfect Credit Score: 850

Excellent Credit Score: 760-849

Good Credit Score: 700-759

Fair Score: 650-699

Low Score: 649 and below

There are ways buyers can help improve and adjust their credit scores. They can request a free credit report once a year from TransUnion, Equifax, and Experian through this website.

Let your buyers know that they can review their credit reports for any errors – if there is an error on one of their accounts, they’ll need to refute the error with the bureau by providing documentation.

Tackling what buyers owe is a major step in improving credit scores – paying on time, and (if they can) paying more than their minimum balance, can help build up that perfect payment history that they need.

For more real estate news and tips, stop by Alliance Title’s Blog.

It’s National Fair Housing Month

This April marks the 53rd anniversary of the Fair Housing Act! This legislation prohibits any housing discrimination based off of race, color, religion, national origin, sex, disability, and family status.

The Fair Housing Act is a great reminder to come together and take action to create equal opportunities in every community. Fair housing is a crucial part of building strong, diverse, and vibrant communities.

For more on what you can do to celebrate and commemorate Fair Housing, check out the National Association of Realtors’ website.

For a free print out on Fair Housing that you can use around your office, check out The Department of Housing and Urban Development’s flyer, here.  

Companies Adjust Pet Policies with the Return to Work

After a little over a year of working from home, it looks like employees are slowly making their way back into the office with the help of vaccine rollouts.

Being at home this often has definitely started new routines and expectations – namely, for your pets. Who’s going to give them constant belly rubs and quick potty breaks if you’re not home all the time like you once were?

Companies are now considering allowing employees to bring their pets to work as they return to the office. According to a survey from Canfield Pet Hospital and OnePoll, 59% of executives state they would allow “more flexibility” for employees to take care of their pets during the work day, and 50% say they would allow employees to bring their pets to work.

Why are companies being so cool about this?

Well, with such an extended period of time being at home, employees are having a hard time thinking of giving up their space to commute and return to the office. The survey also found that 63% of pet owners report anxiety over how their pets will handle their post-pandemic work routine. Companies are hoping that these possible new pet policies will help entice them back.

What are your thoughts? Would you prefer more flexibility for your pet with returning back to the office? Let us know in the comments below!

For more real estate news and updates, stop by Alliance Title’s Blog.

Buyers & Builders in the Real Estate World

Build it and they will come – or at least, buyers will come even before you build it.

The real estate industry is hot; but builders are having a hard time keeping up with buyer demand. According to the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales for single-family houses plummeted 18.2%, which is the biggest decline since 2013.

While construction may have slowed down, buyers still pushed new home sales 8.2% higher than a year ago. New home sales rose 6% in the Northeast, 24.7% in the Midwest, and 23.2% in the South. The West saw sales dropping 9.3%.

So buyers are ready to make that leap and purchase a home – but what’s up with construction?

Economists are pointing to the rising costs of building materials. Materials, specifically lumber, have gone up 59% year-over-year in February.

One big thing to remember: builder optimism remains high. Economists are expecting this drop-off to be temporary and are looking to the spring months for a high rebound.

For more real estate news and insights, check out Alliance Title’s Blog.

Real Estate Agents & First-Time Buyers

Real estate agents are swooping in and being the superheroes they are towards first-time homebuyers!

The National Association of REALTORS®’ newly released 2021 Home Buyer and Seller Generational Trends report shows younger generational groups dominating the housing market – but not only that, they’re reaching out to agents to help make their purchases and decisions.

Millennials are taking up the largest share of buyers at 37%, and even Gen Z (the youngest buying generation) is entering the market.

Younger millennials (those aged 22-30) were the most likely to reach out to a real estate agent during their home search at 91%.

With COVID drastically changing how the real estate market worked with sellers and buyers, the millennial (and Gen Z) generational group embraced virtual tours and in-home shopping; these groups of buyers are generally comfortable with researching online before they reached out to an agent.
Jessica Lautz, NAR’s Vice President of Demographics and Behavioral Insights, explains: “[…] to see [buyers] really embrace virtual tours and virtual open houses was a given, nonetheless, real estate agents are the top information source, and the data shows these buyers ultimately used agents to purchase a home.”

These younger, first-time homebuyers still had difficulties finding the home of their dreams. NAR’s infographic report below showcases ages of buyers, and what they found to be the most burdensome when searching for a home. Most millennial buyers thought finding a property was the hardest part of their home purchasing journey, at 58%.

For more real estate news, stop by Alliance Title’s Blog.

Stop! When’s Closing Time?

Semisonic’s song, “Closing Time,” might come to mind when you are itching to close on your first-ever home and become an official homeowner:

“Closing time, open all the doors and let you out into the world”

Except – when exactly is “closing time” for the real estate world? How long can you expect your closing to take?

According to an origination report from ICE Mortgage Technology, the average time to close all transaction types averaged 58 days in December, which is an increase of 10 days when compared to the same month a year ago.

The average time to close a refinance held at 59 days month over month, and the average time to close purchase increased from 56 days in December to 57 days in January.

For more, stop by ALTA’s News Archive, here.

Check out Alliance’s Blog to further your current real estate knowledge. 

To Rent or To Buy – That is the Question for Homeowners

The weight of a decision to purchase or to rent can be heavy for many potential homebuyers – especially when some buyers feel as though they have no choice but to rent, depending on where they’re currently living.

Realtor.com recently compiled a rent vs buy analysis to determine which locations in America would be more favorable to homebuyers. In their research, they compared the monthly cost of buying a home for the median listing price against the median monthly rent of two-to-four-bedroom units in the area.

Their study found that buying a home is the same or more affordable than renting in 15 of the 50 largest metros, up from 13 markets a year ago.

The top 10 markets that favor buying are as follows:

  1. Cleveland, OH
  2. Chicago-Naperville-Elgin, IL-IN-WI
  3. Pittsburg, PA
  4. Riverside-San Bernardino-Ontario, CA
  5. Miami-For Lauderdale-West Palm Beach, FL
  6. New Orleans-Metarie, LA
  7. Baltimore-Columbia-Townson, MD
  8. Tampa-St. Petersburg-Clearwater, FL
  9. Hartfor-West Hartford-East Hartfort, CT
  10. Detroit-Warren-Dearborn, MI

The top 5 markets that favor renting are as follows:

  1. San Jose-Sunnyvale-Santa Clara, CA
  2. Austin-Round Rock, TX
  3. Sacramento-Roseville-Arden-Arcade, CA
  4. Seattle-Tacoma-Bellevue, WA
  5. San Francisco-Oakland-Hayward, CA

For a more thorough analysis of Realtor.com’s findings, check out their article, here.

Real Estate Tip of the Week: Digital Doesn’t Mean Impersonal

Real estate is having to keep up with technology and it becoming a barrier in relationships.

Digital closings rose significantly amid COVID19; remote closings kept the real estate world ticking, but its left real estate agents wondering how they can continue fostering their networks and connections, if there’s no face-to-face interactions.

Regardless of COVID, digital closings were bound to happen – it’s just happened at an exponential rate that many agents were not prepared for.

Here are some tips to keep your digital closings personal:

Video & Live Chat

If possible, include video and/or live chat features for interacting and closing sales with customers. These can help increase engagement with potential and current clients while handling the process remotely.

Explain, Explain, Explain

Clients are more likely to ask questions to clarify things in person rather than over a video chat. Be sure to carefully explain each document and signature needed. Open the floor for them to ask questions and be sure to allow for plenty of time for interaction while closing.

Offer a Pre-Closing/Post-Closing Video Chat

Prior to the closing date, a title or escrow agent will send the signer the digital closing package. Let your clients know that you are available to go over a virtual consultation video to ease any anxiety or confusion your clients may have before the eclosing.

A recent study found that 2 in 5 people described buying their first home as the “most stressful event” of their lives – help ease this stress!

As a real estate agent, it’s your job to help your client through the entire process of a home purchase or sale – and with the swift change in digital closings, your guidance is even more important!

For more real estate tips, stop by Alliance Title’s Blog.