In this episode of AMBestTV, Fred Eslami, associate director, and Ann Modica, associate director, economic and industry research, AM Best, said title insurers and the housing market have been resilient during the pandemic. Click on http://www.ambest.com/v.asp?v=ambtitleeslamimodica1020 to view the entire program.
U.S. title insurance industry results correlate highly with the U.S. housing market. Eslami addressed how the COVID-19 pandemic put the brakes on the housing market, though it has since rebounded.
"In April, housing starts fell 30% from March and 20% from the year before. The general consensus for AM Best rated title companies was that the market was fluid, and the companies were monitoring their projections for 2020 very closely," said Eslami. "By the end of the second quarter, there had been signs of improvement, given the government bailout and the declining unemployment, With increases in housing starts and sales of existing home inventory, combined with further increases in re-financings, title insurance companies did not see the need to make major adjustments to their original projections."
Modica said the ongoing pandemic makes the path to economic recovery uncertain.
"This is the first recession since the global financial crisis, and it does remain to be seen what type of recovery takes place, which has a lot to do with something we have absolutely no control over: the virus itself. All of these factors can affect the economy in negative ways, as well as the housing and title markets."
To access the related market segment report, titled, "Title Insurance Market Perseveres Amid Upheaval and Economic Uncertainty," please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=301794.
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