With a probable Federal Reserve rate increase on the horizon, title insurance providers are optimistic about future real estate transactions, according to First American Financial Corp.'s Real Estate Sentiment Index for the fourth quarter.
"Title agents view first-time homebuyers as most impacted by a potential interest rate hike, while remaining optimistic regarding the level of sale transactions for those first-time homebuyers in the next 12 months," said Mark Fleming, chief economist of the Santa Ana, Calif., title insurance protection provider, in a Dec. 8 press release.
Respondents indicated that the level of primary residential transactions would begin feeling an impact at a 5.1% interest rate level, while industrial property transaction volume would be affected at the 6.3% level.
Still, their market outlook has dropped from the last quarter. In the October survey, title agents said they expected property prices to rise 5.7% over the coming year; in the third quarter, they envisioned a 6.7% price increase.
The survey, conducted in October with more than 3,000 title agents that have worked with First American, was composed of questions on various metrics impacting the housing industry, such as expectations on price changes, as well as refinance and purchase transaction levels.
