Title Insurance Premiums Decline Just Slightly in 2009: ALTA

After five years of significant declines, title insurance premiums written in 2009 nearly held steady from 2008, the ""American Land Title Association"":http://www.alta.org/ (ALTA) reported Thursday.

[IMAGE]

According to ALTA's 2009 Market Share Analysis, the industry reported a mere 4.5 percent drop in title insurance premiums in 2009, falling to $9.6 billion from $10 billion in 2008. The Washington, D.C.-based trade association said title insurance premiums have fallen steadily since the height of the housing boom in 2005, when premiums reached their pinnacle of $16.9 billion.

""The temporary tax incentives and Federal Reserve's efforts to keep mortgage interest rates low helped bring more consumers into the housing market and modestly rejuvenated a dilapidated housing market,"" said Kurt Pfotenhauer, CEO of ALTA. ""While significant foreclosure activity remains a drag on overall housing prices, the incentives have benefited the title industry to some extent in 2009.""

Despite the national decline, 25 states experienced increases in year-to-year title insurance premiums, ALTA said.

Once again, California generated the most premiums, posting an 8.4 percent spike as premiums increased from $1.4 billion in 2008 to $1.5 billion in 2009.

However, the next three largest markets all experienced declines in premiums. Title insurance premiums in Texas totaled $1 billion, down 17.6 percent from a year earlier, and premiums in Florida totaled $700 million, plummeting 23.8 percent from 2008. In addition, premiums in New York plummeted 22.7 percent to $585 million.

Rounding out the top-five markets, Pennsylvania reported a 9.7 percent increase as premiums improved from $407 million in 2008 to $446 million last year.

According to ALTA, Alaska experienced the largest year-over-year increase as premiums surged 26.3 percent to $38 million. Additionally, premiums in Wisconsin soared 17.6 percent to $120 million, Montana premiums climbed 15 percent to $52 million, premiums in Oregon increased 14.8 percent to $189 million, and Hawaii premiums jumped 14.4 percent to $65 million.

""As indicated by these results, the profitability of the title insurance industry always has been and always will be contingent on the cyclical nature of the mortgage market,"" Pfotenhauer said. ""The scattered improvements illustrate real estate is an extremely local business. Each market performs differently depending on local economic conditions.""