Title CEO Provides Q4 Industry Forecast

Title CEO provides Q4 industry forecast

Moving into the fourth quarter of 2024, title industry leaders are cautiously optimistic for higher volume ahead after the Federal Reserve signaled an imminent interest rate cut.

Dax Junker, CEO of Title Clearing & Escrow, spoke exclusively with The Title Report about what the rest of the year might hold for the title insurance industry and broader housing market.

“There are some promising indicators that the housing market is going to improve,” he said.

“As rates are probably going to decline, this will obviously lead to more refinances and home equity lines of credit. This anticipated rate drop could stimulate market activity, particularly in the resale market, which is already seeing a noticeable uptick. I’m also seeing more activity in the resale market because of the fact there’s more inventory than there was last year. We’re seeing more purchase transactions pretty much uniformly.”

However, Junker was careful not to predict a full return to the boom years of 2020, 2021 and 2022 when asked what level of transaction volume would signal a “new normal” for the industry.

“That depends a lot on your geographical market,” he said. “I can’t predict exactly what type of loan volume we’re going to end up seeing, but I can tell you that we’re seeing an uptick in several areas of the country right now.

“Certain regions are outperforming others. We’re seeing a large concentration in traditionally strong markets: Florida, Texas, Illinois, and New York. But it’s across the board, really. These areas, already known for their robust housing markets, should continue to lead the industry in transaction volume.”

Despite the generally positive outlook, Junker remains skeptical about the potential for another refinancing boom.

Redfin data shows roughly 90 percent of current home borrowers with interest rates locked in below 6 percent. Nearly four in five are below 5 percent while 60 percent are under 4.

Those with rates below 3 percent also form a sizeable portion at 23 percent.

“I don’t anticipate a refi boom because there are so many people locked in at those historically low rates that they’re not going to find again — maybe ever,” Junker said.

“Instead, we could see more activity in secondary loans and loan modifications. We’re seeing a lot of that, but in terms of a boom, I just don’t see that coming right now.”

The possibility of a sudden interest rate drop, as suggested by recent Fed signals, raises concerns about the industry’s readiness to handle an influx of volume, Junker warned.

“The companies that haven’t embraced the new technology are going to be left behind,” he said.

“We’re getting more and more pressure from all our clients, particularly large lenders, to integrate with our vendors and banks. If you don’t have those technology integrations in place by the time there’s a major influx in refinances, you’re going to be left behind.”

In terms of long-term survival and success, Junker emphasized the need for title companies to diversify.

“You’ve got to diversify to sustain yourself as a title company now, especially when the housing market is somewhat depressed and rates don’t lend themselves to a lot of refinances,” he said.

“Companies need to explore partnerships with mortgage servicers, lenders, Realtors, energy companies, and underwriters. Traditional closings are just one source of business, one source of revenue. There are many other sources of revenue that some companies overlook, particularly on the default side.

“Many phases of defaults offer opportunities for revenue if the title company has the expertise to handle that work.”