With the spring 2024 home purchase season falling short of expectations, publicly traded title insurers reported a meh second quarter for their business.
In its Aug. 15 reports affirming First American's and Stewart's rating, Fitch said "the title insurance industry [has] reported a recent decline in operating results relative to the very strong performance experienced during the pandemic years. Margin compression has been driven by higher interest rates and home affordability challenges that has limited origination activity."
The business is affected by the broader macroeconomic trends which continue to pressure top-line revenues, Fitch noted in its report on Fidelity National Financial, whose ratings it also affirmed.
"Elevated mortgage rates and increased affordability concerns continue to suppress both refinance and new purchase origination transactions, a trend which is expected to persist over the near term," the FNF comments said.
But in the Stewart and First American reports, the analysts made the same comment, that "performance remains within rating sensitivities and is expected to improve with a return to stronger purchase and refinance markets."
As for the competitive threats the industry is facing, especially from the federal government, Fitch said the various initiatives are not expected to impact any of the three companies' ratings.
Here are the second quarter results for the publicly traded title insurers:
