Resources Archives - Page 24 of 37

The New World of eClosing

April 27, 2021

by Republic Title Digital Settlement Resources Title Information Video

Welcome to the world of eClosing! There are many new terms to become familiar with when discussing digital settlement and eClosings. The transition to eClosing has created a plethora of new terms including In-Person eClosing, Remote Online Notarization, RON, Hybrid eClosing, etc. and we want to help you get familiar with the language and how it all works.

A few questions that will come up when discussing eClosings are:

1. When are we signing?

2. Where are we signing?

3. How are we signing?

What is eVolve?

eVolve is Republic Title’s Digital Settlement and Signing Services Division and provides a new, convenient, and alternative experience in buying/selling real estate. Republic Title is leading this transformation and developing innovative and secure ways to evolve this process for our customers. Technology and added convenience are constantly changing the way people conduct business. When our customers have scheduling conflicts — whether it’s a busy day in the office or traveling on vacation — Republic Title is able to facilitate the transaction through one of our premium closing services, either at a place of business through our Mobile First experience or through our Remote Online Notary eClosing experience. Our dedicated team of professionals will provide our customers with a clear understanding of what is being signed and why it’s needed, ensuring a worry-free closing from anywhere in the world. For more information about eVolve or eClosings, visit our website at: https://www.republictitle.com/evolve

Get To Know Our Calculators

April 26, 2021

by Republic Title Resources Technology Title Information

Republic Title is proud to offer a host of new buyer and seller estimate tools on our Republic Title Mobile app and website. Calculators include:

Title Quote – calculates title rates and fees
Loan Estimate Quote – shows the costs associated with closing on your mortgage as well as over the lifetime of the loan
Seller Net Sheet – itemizes the fees and expenses in your transaction, to give you a pretty accurate estimate of what you’ll net in the sale
Sell to Net – shows a seller the sales price needed to meet a specific net proceed goal when they sell their house
Seller’s Multiple Offers – allows a seller to compare multiple offers from different buyers side by side
Buyer Estimate – shows the buyer their all in amount due at closing plus their all in monthly payment
Monthly Affordability – shows buyer what their total purchasing power is based on their budget
Rent vs Buy – shows buyer the difference in monthly costs when comparing renting vs buying

Our new calculators can be found by downloading our new app, Republic Title Mobile, in the Apple App Store or in the Google Play Store. For a website version of the new calculators, visit republictitle.titlecapture.com

March 2021 DFW Area Real Estate Stats

April 21, 2021

by Republic Title Real Estate Articles Resources Stats Video

The March 2021 DFW area real estate statistics are in and we’ve got the numbers! Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. We encourage you to share these infographics and video with your sphere.

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

What is an eClosing?

April 19, 2021

by Republic Title Digital Settlement Real Estate Articles Resources Title Information Video

An eClosing involves using some combination of electronic documents, electronic signatures, electronic notarization, or electronic recording. An eDocument, or electronic document, is a digital document as opposed to a scanned image of a paper document. An eSignature is a process used to apply a signature to an electronic document in place of a wet ink signature. An eNotarization is a process of applying the notary’s electronic signature and notarial seal to an electronic document. eRecording is the process of recording the electronic document in the county records in its original form.

What is eVolve?

Texas Housing Insight – February 2021 Summary

April 15, 2021

by Republic Title Real Estate Articles Resources Stats

Total Texas housing sales plummeted 16.1 percent in February as Winter Storm Uri swept across the state, causing widespread power and water outages. Before the freeze, however, sales were at record levels and should rebound in March as indicated by the Texas Real Estate Research Center’s single-family sales forecast. The number of new homes added to the Multiple Listings Service (MLS) was also negatively affected by the wintery weather, exacerbating the limited supply issue. Building permits and housing starts decreased on a monthly basis but remained elevated overall, which bodes well for construction activity this year. Additionally, improved economic growth and inflation expectations contributed to rising mortgage interest rates, the continuation of which may slow the current breakneck pace of sales. Depleted inventory is the greatest challenge to Texas’ housing market, assuming the pandemic remains contained.

Supply¹

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, ticked up as industry employment and wages improved. The Residential Construction Leading Index also continued its upward trajectory due to overall elevated building permits and housing starts despite monthly contractions, pointing toward increased construction in the coming months. Similarly, the metropolitan leading indexes suggested future activity to be favorable. Only in Houston, where permits and starts fell significantly, did the metric indicate an impending slowdown in building.

Single-family construction permits declined for the second straight month in February, dropping 12.4 percent. Nevertheless, issuance exceeded its 2006 average and elevated 20.8 percent compared with last year on a year-to-date (YTD) basis. Dallas-Fort Worth continued to lead the nation with 3,796 nonseasonally adjusted permits, followed by Houston at 3,395 permits. Issuance in Austin decreased to 1,862 permits but still remained well above pre-Great Recession levels. Although San Antonio’s metric ticked down to 1,000 permits, the overall trend persisted upward. Similarly, Texas’ multifamily permits sank 11.5 percent; year-over-year comparisons, however, were largely positive.

Amid rising lumber prices and utility outages across the state, total Texas housing starts fell 6.2 percent. Single-family private construction values decreased 13.3 percent in real terms after flattening the previous month. Monthly fluctuations in Houston construction values reflected broader movements in the statewide metric, while Austin and Dallas values normalized from record activity. San Antonio values also corrected downward in February after increasing by a third of December levels, flattening at its year-long average.

Although sales declined, the number of new MLS listings plunged to its lowest measure since the economic shutdown last spring, pushing Texas’ months of inventory (MOI) down to an all-time low of 1.5 months. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 was even more constrained, dropping below 1.2 months. Even the MOI for luxury homes (homes priced more than $500,000) slid to 2.7 months compared with 5.8 months a year ago.

The supply situation in Austin and North Texas was even more critical than the statewide metric. Inventory expanded minimally in Austin’s mid-range price cohorts, but the overall MOI flattened at 0.5 months. Meanwhile, Dallas and Fort Worth’s metric fell to 1.1 and 1.0 months, respectively. On the other hand, the Houston MOI remained highest out of the major metros despite ticking down to 1.9 months. Fluctuations in San Antonio inventory matched the state average.

Demand

After a solid start to the year, total housing sales decreased 16.1 percent in February during severe disruptions to the state’s power grid due to the winter storm. Activity declined across the price spectrum from record transactions the month prior for all but the bottom price cohort (less than $200,000). Still, luxury home sales remained in positive YTD growth territory. The sales composition continued with shift toward homes priced more than $300,000 due to depleted inventory and rising building costs.

Luxury home transactions remained positive YTD in the major Metropolitan Statistical Areas (MSAs). Nevertheless, total sales fell 18.3 and 19.7 percent in San Antonio and Houston, respectively, and trended downward in Austin and North Texas. Austin sales plummeted 23.6 percent, but the list-to-sale-price ratio climbed above 1.0 for the fourth consecutive month, indicating especially robust demand. Dallas sales sank 13.1 percent on top of revisions to January data that revealed only modest improvement at the start the year after a sluggish fourth quarter. Fort Worth was the exception, with activity down from year-end levels across the price spectrum. Moreover, total sales declined for the second straight month, registering a 15.3 percent drop in February.

Although Texas’ average days on market (DOM) flattened at 42 days, it still hovered at an all-time low and shed more than two weeks off its year-ago reading, corroborating strong demand as low mortgage rates remained favorable to homebuyers. The metric also stabilized across the major metros, albeit at lower levels in markets of exceptionally low inventory where available listings were snapped up after just 26 days in Austin and 33 and 30 days in Dallas and Fort Worth, respectively. The average home in Houston and San Antonio sold at a rate closer to the state measure, staying on the market for 41 days in Houston and 44 days in San Antonio.

Progress on the vaccine front and an approved third fiscal stimulus package resulted in higher growth and inflation expectations for 2021. The ten-year U.S. Treasury bond yield rose to an annual high of 1.3 percent² in February. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate ticked up for the second straight month to 2.8 percent, although the metric still hovered around historically low rates (series starting in 1971). Further increases in mortgage rates this year may soften housing demand and slow home-price appreciation. Mortgage rates remained low within Texas during January³, sinking to 2.66 percent for non-GSE loans, while the median interest rate for GSE loans was 2.80 percent. February home-purchase applications were affected by the winter storm, falling 14.8 percent YTD but remaining positive relative to year-ago levels. Similar fluctuations were observed in refinance activity as lenders added more requisites and the pool of households able to refinance shrank. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.)

Prices

Although sales activity slowed during the winter storm, the Texas median home price continued to post strong growth, accelerating 13.2 percent year over year (YOY) to $280,400. A shift in the composition of sales toward higher-priced homes due to constrained inventories at the lower end of the price spectrum contributed to the rise in prices. In Austin and Dallas, where the luxury home market share increased by more than 10 percentage points from last February, the median home price skyrocketed by a record 22.4 and 16.9 percent annually to $398,700 and $344,500, respectively. The Fort Worth metric ($287,900) also rose by an unprecedented 15.7 percent YOY, while San Antonio’s ($268,200) and Houston’s ($281,700) median home prices elevated 11.0 and 12.2 percent, respectively.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. The index corroborated increased home-price appreciation, climbing 10.4 percent YOY, but the rate was less than the surge in the median home price suggested. Houston’s metric rose by a relatively moderate 7.5 percent, less than the average price appreciation in 2014. The Dallas and Fort Worth indexes jumped 11.4 and 11.7 percent, respectively. On the other hand, the index in Central Texas was more or less in line with median price growth, soaring 23.3 percent in Austin and 10.4 percent in San Antonio. Home-price appreciation unmatched by income improvement will continue to chip away at housing affordability in 2021, especially as mortgage rates rise.

Single-Family Forecast

The Texas Real Estate Research Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Only one month in advance was projected due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Texas sales are expected to rebound 12.1 percent in March from the impacts of the winter storm that swept across the state in February. The recovery in Houston and San Antonio is predicted to surpass the state average as single-family sales improve about 17.0 and 13.2 percent, respectively. Austin and DFW sales activity will likely be more subdued, but first quarter transactions should still exceed 1Q2020 levels.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, 8 percent of Texas homeowners were behind on their mortgage payments during February, greater than the national share of 7 percent and an uptick from the previous month (Table 2). The metric also inched up within Texas’ largest metropolitan areas to 6 and 11 percent in DFW and Houston, respectively. The share of Texas respondents who were not current and expected foreclosure to be either very likely or somewhat likely in the next two months, however, rose only incrementally to 13 percent (Table 3). The proportion of delinquent individuals who were at risk of foreclosure decreased to just 9 percent in North Texas but jumped to one-third in Houston. The increase may be associated with negative economic impacts from the winter storm during February. The Federal Housing Finance Agency’s foreclosure and REO eviction moratoriums for properties owned by Fannie Mae and Freddie Mac (the Enterprises) are currently extended through June 30, 2021. After the survey was taken, the Center for Disease Control and Prevention also renewed its federal eviction moratorium through the end of June. Continued stability in the housing market is essential to Texas’ economic recovery.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (April 12, 2021)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

Notice of Important TREC Contract Updates

March 29, 2021

by Republic Title Education Real Estate Articles Resources Video

New TREC contract changes become mandatory April 1st.

We sat down with Charles Kramer, Co-Chair of the Texas Real Estate Commission (TREC) Broker-Lawyer Committee, to discuss the changes and what you need to know for your business.

Contract changes include:

Residential Lease and Addendum
Fixture Leases and Addendum
New Option Fee Procedures
New Smart Home Provisions
HOA Addendum Changes

Key changes to the new option fee procedures include:

Buyer can now write one combined earnest money and option feed check or two separate checks.
Checks must be made payable to the title company.
There is a 3 day deadline for option fee and earnest fee.
The option fee will be automatically credited at closing. If the seller would like the option fee right away, they must let the title company know.

To learn more about the changes and see the updated forms, visit the TREC website .

For the redlined version of the contract changes, where you can see what has been changed, click here.

Texas Housing Insight – January 2021 Summary

March 24, 2021

by Republic Title Real Estate Articles Resources Stats

Total Texas housing sales kicked off the year with a 3 percent improvement, surpassing 38,500 sales to an all-time high. Fort Worth was the only major region within the state where the metric decreased relative to December 2020, although the trend in activity across both sections of the North Texas Metroplex flattened. On the supply side, inventory fell to critically low levels, while new construction indicators stumbled. Combined with dwindling listings, solid demand during low mortgage rates pushed median home price growth up by double-digit percentage increases. Overall, housing demand is expected to remain healthy in 2021 as vaccine rollouts continue, and the approval of a third federal stimulus package aids the economic recovery. Depleted inventory is the greatest challenge to Texas’ housing market, assuming the pandemic is contained.

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction levels, ticked up as construction values, employment, and wages improved. The Residential Construction Leading Index also continued on an upward trajectory due to overall elevated building permits and housing starts despite a monthly contraction in January, pointing toward higher construction activity in the coming months. Similarly, the metropolitan leading indexes indicated future activity to be favorable. Only in Houston did the metric flatten.

Recently released fourth-quarter private bank loan data indicated net residential loans decreased 1.1 percent quarter over quarter (QOQ) at the end of 2020 after lending standards tightened throughout the year due to pandemic-related economic uncertainty. Construction investment for one-to-four units led with a third consecutive quarterly decline. Large multifamily projects (buildings consisting of five or more units) flattened at its 2Q2020 series high of $8.9 billion.

Single-family construction permits dropped 8.1 percent from a record high in December. Austin issued 1,940 nonseasonally adjusted permits, exceeding its 2006 average in per capita terms, as did Dallas-Fort Worth. The metro topped the national list with 4,330 permits despite declining in January after adjusting for seasonality. Houston’s metric also stabilized after a strong end to the year, resulting in 4,258 permits. On the other hand, issuance in San Antonio increased for the fifth consecutive month to more than 1,200 permits. In Texas’ multifamily sector, permits trended upward after sluggish activity in 2020 when the pandemic shifted focus away from the apartment sector.

Although the Department of Commerce lowered tariffs on Canadian lumber from 20 to 9 percent at year end, lumber prices increased for the second straight month to an unprecedented level in January. Amid rising homebuilder costs, total Texas housing starts fell 4.8 percent as the single-family sector accounted for reduced activity in the southern region of the U.S. Lumber prices are expected to remain volatile in 2021, pressuring housing affordability in conjunction with robust housing demand. Reflecting monthly fluctuations in starts, single-family private construction values decreased 8.5 percent. The metric declined in DFW and Houston but ticked up in Central Texas.

Increased sales and a downward correction in new listings after activity recovered in the second half of 2020 pulled Texas’ months of inventory (MOI) down to an all-time low of 1.7 months. A total MOI around six months is considered a balanced housing market. Inventory for homes priced less than $300,000 was even more constrained, dropping below 1.3 months. Even the MOI for luxury homes (homes priced more than $500,000) slid to 3.2 months compared with 6.1 months a year ago.

The supply situation in Austin was especially critical, with the MOI trending down for two consecutive years to just half a month. Despite modest expansions in San Antonio’s and Houston’s inventory for homes priced less than $200,000, the overall metric fell to 1.7 and 2.2 months, respectively. In Fort Worth, the MOI ticked down to 1.2 months as contractions in the supply of active listings offset slower sales activity. The Dallas metric was not far behind, slipping to 1.3 months.

Demand

Total housing sales rose 3 percent to a record high in January after slumping the previous two months. Activity increased across the price spectrum, while sales for homes priced less than $300,000 ticked up for the second straight month. Nonseasonally adjusted transactions at the bottom price cohort (less than $200,000), however, fell to the lowest level in the series’ January history, with more than half occurring outside the major metros. The downward trend corroborates the shift in sales to higher-priced homes due to depleted inventory and rising building costs.

San Antonio and Houston sales extended strong upward trends to kick off the year, climbing 4.2 and 6.9 percent, respectively. Austin’s metric elevated 7.3 percent, while the metro’s list-to-sale-price ratio registered above 1.0 for the third straight month, confirming robust demand despite sales falling the previous two months. Dallas transactions also increased after sluggish activity in 4Q2020, accelerating 4.4 percent in January. Levels, however, remained down from October 2020 all-time high. Fort Worth was the exception as sales declined 2.3 percent due to decreased activity in the bottom cohort following a brief pick up at year end.

Texas’ average days on market (DOM) reached an all-time low of 43 days, corroborating strong demand as low mortgage rates remained favorable to homebuyers. Austin’s DOM shed almost a month off its year-ago reading, falling to 28 days. The other metros dropped more than two weeks from January 2020 levels, although the metric in Dallas ticked up slightly from the previous month to 36 days. The Houston DOM inched down to 41 days while the average home in San Antonio and Fort Worth sold after 44 and 30 days, respectively.

Vaccine rollouts and optimism regarding a third fiscal stimulus package resulted in higher growth and inflation expectations for 2021. The ten-year U.S. Treasury bond yield rose to 1.1 percent¹ in January, its highest level since February 2020. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate ticked up for the first time in a year to 2.7 percent, although the metric still hovered around its historically low rate recorded at year-end (series starting in 1971). Anticipated increases in mortgage rates this year may soften housing demand. Mortgage rates slid to decades-low levels within Texas during January, sinking to 2.66 percent for non-GSE loans, while the median interest rate for GSE loans was 2.80 percent. Home-purchase applications boomed more than 20 percent in 2020, but activity softened to start the new year. Refinance applications also stabilized after doubling the previous year. The pace is expected to decelerate as the lenders add more requisites and the pool of households able to refinance shrinks. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.)

In January, the median loan-to-value ratio (LTV) and debt-to-income ratio (DTI) constituting the “typical” Texas conventional-loan mortgage increased from 84.5 to 85.8 and 34.5 to 35.3, respectively. The median credit score fell from 756 to 750 but still remained elevated relative to 2019 levels due to the rise in average consumer credit scores from relief actions taken by the federal government and lenders who helped some households pay off debt and save money. The metrics of the typical Texas borrower who obtained a loan from a government-sponsored enterprise (GSE) stabilized at 85.4 for the median LTV and 35.8 for the median DTI.

Prices

Solid housing demand and depleted inventory resulted in multidecade high home-price growth. The Texas median home price accelerated 12.6 percent year over year (YOY) to $277,900. A shift in the composition of sales toward higher-priced homes due to constrained inventories at the lower end of the price spectrum contributed to the rise in prices. All four major metros experienced double-digit home-price appreciation, but Austin led with a 19.7 percent increase to $379,700. The Dallas median price reached $336,200 after jumping 12.2 percent YOY while the San Antonio metric surged 13.4 percent to $265,600. Movements in Fort Worth’s ($280,000) and Houston’s ($276,200) median price were similar, elevating 11.4 and 11.5 percent, respectively.

The Texas Repeat Sales Home Price Index accounts for compositional price effects and provides a better measure of changes in single-family home values. The index corroborated increased home-price appreciation amid robust housing activity, rising 9.5 percent YOY, but the rate of growth was still less than the surge in the median home price suggested. On the metropolitan level, each index accelerated YOY with Austin’s metric booming 17.6 percent. Home-price appreciation in Dallas also exceeded the state average at 9.7 percent. In Fort Worth and San Antonio, the index jumped 9.1 and 8.7 percent, respectively, followed by the Houston metric at a 7.6 percent clip. Home-price appreciation unmatched by income growth will continue to chip away at housing affordability in 2021, especially as mortgage rates increase.

Single-Family Forecast

The Texas Real Estate Research Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Only one month in advance was projected due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Texas sales are expected to decrease 14.2 percent in February from activity in January due to impacts of the winter storm that swept across the state. Declines in North Texas and San Antonio activity are predicted to hover close to the state average, but Houston and Austin transactions may drop around 17.5 and 20.5 percent, respectively.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, 6 percent of Texas homeowners were behind on their mortgage payments during January, less than the national share of 7 percent (Table 2). Within Texas’ largest metropolitan areas, the metric declined compared with the previous month, falling to 5 and 8 percent in DFW and Houston, respectively. Moreover, only 12 percent of the respondents in Texas who were not current expected foreclosure to be either very likely or somewhat likely in the next two months compared with just 17 percent nationwide (Table 3). The proportion of delinquent individuals who were at risk of foreclosure ticked up to 15 percent in North Texas but flattened at 14 percent in Houston. Just after the survey was taken, the Federal Housing Finance Agency extended the foreclosure and REO eviction moratoriums for properties owned by Fannie Mae and Freddie Mac (the Enterprises) until June 30, 2021. Eligible borrowers were also granted an additional three-month extension of forbearance for a total of up to 18 months of forbearance. The Center for Disease Control’s federal eviction moratorium is set to expire at the end of March. Continued stability in the housing market is essential to Texas’ economic recovery.

________________

*All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

¹ Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, Paige Silva, and Griffin Carter (March 18, 2021)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

February 2021 DFW Area Real Estate Stats

March 17, 2021

by Republic Title Real Estate Articles Resources Stats Video

The February 2021 DFW area real estate statistics are in and we’ve got the numbers! Our stats infographics include a year over year comparison and area highlights for single family homes and condos broken down by MLS area. We encourage you to share these infographics and video with your sphere.

To see past month’s reports, please visit our resources section here.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Celebrating International Women’s Day

March 8, 2021

by Republic Title Inside Republic Title Resources

With 318 women making up 75% of our workforce, we are surrounded by smart and talented women at Republic Title. In celebration of International Women’s Day, we’d love for you to meet 3 amazing women who have made an impact at Republic Title and our culture.

Felicia Farnsworth
Executive Vice President/Human Resources

Felica Farnsworth is Executive Vice President of Human Resources and has been with our company for 22 years. In her role, Felicia oversees the benefits of our employees and works hard to keep our employees safe, healthy and happy. Felicia says that the best leadership advice that she has ever received is to be a student of your job – receptive; flexible; embracing; and willing. She says that Republic Title’s culture is incredibly special and that all employees pull together to help each. You don’t even have to ask twice. A recent new hire recently commented on how great it is to see how everyone is so willing to help. When asks what energizes her at work, Felicia says” Witnessing the positive, optimistic and can-do attitudes that our employees possess. The camaraderie our employees have and the willingness to help one another is truly amazing. Every day is a great day when the people you work with shine with so much positivity.”

Favorite Leadership Quote: “That which we manifest is before us; we are the creators of our own destiny. Be it through intention or ignorance, our success and our failures have been brought on by none other than ourselves.” Garth Stein, The Art of Racing in the Rain

Sheri Groom
Executive Vice President/Residential Operations

Sheri Groom is Executive Vice President and oversees all aspects of our residential operations including our corporate departments and thirteen branch offices. Sheri’s best leadership advice is to be authentic, cast a vision to your teams and the plan for how to get there as well as build teams where everyone has different strengths. Sheri says that the teamwork is what makes the Republic Title culture so special adding, “Everyone has each other’s back. The people who care about people outside of themselves and truly want to make a difference and leave something better than they found it.” With 24 years at Republic Title, the past year has brought new challenges to our company and employees. Sheri credits Republic Title’s success to the spirit of our employees and their “can do” attitude. Sheri says, “I have always known that all great teams have to overcome adversity and challenges and that the measure of our success will not be determined by how we act during great times in our life but rather how we think and respond to the challenges of our most difficult moments and our employees were simply amazing.”

Leadership Podcast Recommendation: The Brendon Show with Brendon Burchard

Lisa Murray
Executive Vice President/Chief Financial Officer

Lisa Murray is Executive Vice President and Chief Financial Officer where she oversees all financial aspects of our company. Lisa is also passionate about creating a great culture at Republic Title and is active on our Employee Relations Committee. Lisa says that Republic Title’s culture is special because of the focus on working together as a team to provide the best service to the customer and the ability for everyone to make a difference in the process. When asked the best leadership advice that she has ever received, Lisa said, “Leaders need to continually learn and grow, adapt to the changing world with a positive solution-oriented mindset and provide clarity on the vision ahead.” At work, Lisa enjoys making a difference by adding value to the team through solving problems, inspiring others and helping people grow. Outside of work, she enjoys spending time with family and friends, travelling, hiking, biking, skiing, giving back to others, and bringing a sense of joy and hope to people around her.

Favorite Leadership Author: John Maxwell is a well-known expert on leadership. He has a great podcast, and has written many books that are an incredible resource. On a recent podcast he said that during times of crisis or adversity we need to make the choice to learn and grow from the experience and decide how we can add value.

The past year has been unprecedented to say the least. We are encouraged by these three women – and the 315 others that make up Republic Title – who have adapted to change, risen to the challenges, and who make Republic Title shine.

Texas Housing Insight – 2020 Annual Summary

March 4, 2021

by Republic Title Real Estate Articles Resources Stats

The Texas housing market was off to a solid start at the beginning of 2020 as mortgage interest rates declined. Sales activity plummeted in March and April, however, due to the emergence of COVID-19 and a mandated economic shutdown across the state. Nevertheless, homebuying demand accelerated during the summer for those less affected by the pandemic as remote-work-and-school spaces prompted the desire for additional space in the house, interest rates continued to fall, and more millennials entered the housing market. Almost 393,200 homes were sold through the Multiple Listing Services (MLS) during 2020, a near double-digit percentage increase from activity the previous year. On the other hand, homeowners were cautious about listing their homes on the market and hosting in-person showings, contributing to a plummet in available inventory, particularly for homes priced less than $300,000. In an environment of robust demand and shrinking supply, home-price appreciation surged, pressuring housing affordability.

The same factors that defined 2020 will remain relevant in the new year. The housing market will continue to be characterized by strong demand but constrained inventory and substantial price growth. Nevertheless, the Texas Real Estate Research Center expects single-family sales to increase 8.4 percent in 2021. Containment of the coronavirus and government support is essential for a positive economic and housing outlook during ongoing pandemic-related uncertainty. (For additional commentary, see the 2021 Texas Housing & Economic Outlook.)

Supply*

The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, flattened in 2020 as industry hiring was sluggish during the pandemic. The Texas Residential Construction Leading Index, however, reached an all-time high in 2020 due to record low interest rates and strong building permits and housing starts, indicating construction activity will pick up in the new year. These metrics in Texas’ major Metropolitan Statistical Areas (MSAs) trended upward, especially in Austin and Houston, supporting a positive outlook.

In response to supply shortages, developers accelerated activity at the earliest stage of the construction cycle. According to Zonda, formally known as MetroStudy, the number of new vacant developed lots (VDLs) in the Texas Urban Triangle elevated 8.8 percent annually in 2020 to reach 116,500, four-fifths of 2006 levels. Lot development in Houston and San Antonio rose for the third straight year, climbing 12.0 and 29.8 percent, respectively, with improvement in all price ranges except for homes priced less than $200,000. Dallas-Fort Worth (DFW) activity rebounded 4.5 percent after contracting in 2019, but the increase was limited to the upper-end of the price spectrum. Meanwhile, Austin’s metric normalized after skyrocketing the previous year.

Strong lot development was matched by a near-record 153,600 single-family housing construction permits issued in Texas. The statewide metric accelerated 21.9 percent and comprised 16 percent of the national total during 2020. Austin posted an all-time high of 21,400 permits while the growth rate in DFW exceeded the state average at 24.2 percent to issue more than 43,500 permits. Activity in Houston and San Antonio increased by one-fifth, resulting in 48,100 and 10,700 permits, respectively.

Total Texas housing starts fell into double-digit negative growth territory during the first half of the year amid pandemic-related declines in activity. Despite soaring lumber prices, the metric rebounded strongly in the third quarter, pushing overall annual improvement up 9.5 percent. Per Zonda, single-family starts in the Texas Urban Triangle rose 18.9 percent, largely due to increased activity in the $200,000-$400,000 price range as starts for homes priced less than $200,000 stepped back after a brief reprieve the previous year due to rising construction costs. Single-family starts in North Texas and Houston skyrocketed 21.0 and 20.2 percent, respectively. San Antonio starts sustained strong growth, jumping 19.2 percent. Although the pace decelerated in Austin, the metro still started more than 21,300 single-family homes, leading the Texas Urban Triangle in per capita terms. Tariffs on Canadian lumber were reduced from 20 to 9 percent in December, providing some relief to construction costs in 2021, although lumber prices remain extremely high.

Even with the economic shutdown in spring, $37.9 billion of new construction poured into Texas’ single-family market amid growing demand stemming from population growth and a shift in preferences for more livable space. Single-family private construction values climbed 13.9 percent annually after adjusting for inflation. Similar to other supply-side indicators, DFW and Houston accounted for the majority of the statewide increase after sluggish activity in 2019. Austin recorded a decade of growth while San Antonio posted double-digit percent improvement for the second consecutive year.

Robust demand and a decline in the number of new MLS listings contributed to the first annual decrease in active listings since 2015, pulling Texas’ total months of inventory (MOI) down to 1.7 months. A total MOI of around six to 6.5 months is considered a balanced housing market. Inventory fell across all price cohorts, but the metric for homes priced less than $300,000 averaged just 1.3 months. Even the MOI for luxury homes (priced more than $500,000) sank from 5.0 to 2.9 months as constrained supply at the lower end of the price spectrum pushed buyers toward higher-priced homes.

Inventory was most depleted in Austin where the MOI plummeted below 0.6 months. The North Texas metric slid below the state average, falling to 1.2 and 1.1 months in Dallas and Fort Worth, respectively. Houston’s MOI sank for the second straight year to two months but remained the most elevated out of the major MSAs. San Antonio inventory hovered above the statewide metric, although the metro was still supply-limited with an MOI of 1.7 months.

Demand

More than 393,100 Texas homes sold through MLSs in 2020, a 9.4 percent increase over the previous year. The surge in homebuying highlighted the disparate impacts of the pandemic across the socioeconomic spectrum; in general, families who bought a house were more likely to be able to work from home and keep their jobs during the pandemic compared with many lower-income and lower-skilled renter households who struggled financially. The bottom end of the market (homes priced less than $200,000) dragged on overall activity, plunging double-digits in percentage terms amid a severe lack of supply and rising construction costs. Nevertheless, overall sales outpaced the national growth rate (7.1 percent) for the fourth straight year.

At the metropolitan level, San Antonio led with growth of 11.5 percent. Despite year-end declines in activity, Dallas and Austin sales still increased 9.8 and 8.4 percent annually, respectively, after home-price appreciation slowed in 2019. Transactions in Fort Worth accelerated 6.3 percent after modest improvement the previous year, while Houston’s metric climbed 9.2 percent.

In the new-home market, each major MSA posted double-digit sales growth per Zonda, boosting overall activity. Similar to total sales, San Antonio recorded the greatest annual percentage increase of 17.7 percent, selling 15,000 new homes in 2020. Notably, sales for homes priced less than $200,000 ticked up for the second straight year after the same price cohort accounted for a quarter of the metro’s single-family starts in 2019. Austin’s metric reached 21,000 for the first time, largely due to elevated sales for homes priced $300,000 and $400,000, while DFW registered 40,800 new-home sales. Both locales registered accelerated activity during the second half of the year. Despite a low oil-price environment, new-home sales in Houston surged 12.8 percent to 34,500 compared with three consecutive annual declines between 2015-17.

According to the U.S. Census Bureau’s Current Population Survey/Housing Vacancy Survey, Texas homeownership normalized during fourth quarter 2020 to average 66.5 percent over the year compared with the national rate of 66.6 percent. Homeownership increased annually at the metropolitan level as well despite fourth-quarter declines. The rate in Austin and Houston shot up to 65.4 and 65.2 percent, respectively. DFW’s metric climbed to an all-time high of 64.7 percent (series starting in 2005), while 64.2 percent of San Antonio’s total housing units were owner-occupied. The overall rise in homeownership was largely due to elevated home purchases by millennials spurred by historically low mortgage interest rates. Young adults who moved back home with their parents during the pandemic due to job losses or remote schooling, which decreased the number of households, may have contributed to the elevated rate.

Amid record-breaking sales activity, Texas’ average days on market (DOM) slid to 55 days, corroborating robust housing demand. Austin and Dallas both shed a week off their DOMs, sinking to 45 and 46 days, respectively. The average home sold even faster in Fort Worth after just 42 days on the market. Demand was slightly softer in San Antonio than the rest of the state, but the metric still fell to 57 days. Meanwhile, the Houston DOM ticked down to 54 days.

Economic uncertainty surrounding the COVID-19 pandemic prompted investors to purchase safe-haven assets at an accelerated rate during the first half of the year, pulling interest rates to historically low levels. Expansionary monetary measures by the Federal Reserve and development on the vaccine front generated higher growth expectations, pushing interest rates up in the fourth quarter, but the ten-year U.S. Treasury bond yield still fell 125 basis points in 2020, averaging a record-low 0.9 percent. Meanwhile, the Federal Home Loan Mortgage Corporation’s 30-year fixed-rate sank to 3.1 percent. Mortgage rates slid to decades-low levels within Texas, falling from 4.2 to 3.2 percent for conventional, or non-GSE, loans. For GSE borrowers, the median mortgage rate was slightly higher during 2020 at 3.3 percent but still a significant decline from 4.4 percent the previous year. Texans capitalized on lower rates, pushing mortgage applications for home purchases up 24 percent compared with 2019. Refinance mortgage applications, which are more sensitive to interest rate fluctuations, more than doubled during the same time period after tripling during 2019. The growth rate of refinances is expected to decelerate in 2021 as the pool of households able to refinance shrinks. (For more information, see Finding a Representative Interest Rate for the Typical Texas Mortgagee.)

Corroborating tightening lending standards during the economic downturn, the debt-to-income ratio (DTI) constituting the “typical” Texas non-GSE mortgage decreased from 37.6 to 36.3 in 2020. The median credit score increased from 738 to a multidecade high of 746 as average consumer credit scores rose due to relief actions taken by the federal government and lenders that helped some households pay off debt and save money. The median loan-to-value ratio (LTV) flattened at 86.7 for non-GSE loans, while the GSE metric sank from 86.2 to 85.9. The DTI for GSE borrowers also ticked down, falling from 37.2 to 35.8. Despite a projected rise in delinquencies in the new year, lending standards are predicted to ease somewhat in 2021 due to expectations of overall better loan performance.

Prices

Robust demand and dwindling inventory pushed home-price growth to its highest level since 2013 when prices were still recovering from the Great Recession. The Texas median home price skyrocketed 7.9 percent annually to $259,000 relative to a 3.2 percent pace in 2019. The $19,000 increase is partially due to a distributional shift in sales activity away from the lower-end of the price spectrum to higher-priced homes. Central Texas led the major metros in median price growth with the metric rising 9.2 and 8.4 percent to $344,000 and $249,400 in Austin and San Antonio, respectively. The Dallas metric rose to $311,000 while the median price in both Fort Worth and Houston jumped to $260,000.

The Texas Repeat Sales Home Price Index, a better measure of changes in single-family home values, provides insight into how Texas home prices evolve. Home-price appreciation accelerated 5.2 percent annually during 2020 amid strong demand during the second half of the year. In Austin, the index soared at its fastest clip since 2014 at 8.3 percent. The North Texas metric increased 5.1 and 4.3 percent in Fort Worth and Dallas, respectively, while San Antonio landed in the middle, posting 4.9 percent growth. Houston’s index rose at a more moderate rate of 3.9 percent.

Elevated home prices offset historically low mortgage rates, capping affordability gains during 4Q2020 after strong improvement in 2019. Houston was the most affordable major MSA with an index of 1.9, indicating that a family earning the median income could afford a home costing 90 percent more than the median sales price. The metro also posted the largest percentage increase relative to year-ago levels, followed by Fort Worth, where the metric jumped to 1.8. The index flattened at 1.7 in both Austin and San Antonio, as well as in Dallas. Housing affordability is important to Texas’ demographic advantages that have supported the state’s economic prosperity over the past decade.

Single-Family Forecast

The Center projected single-family housing sales using monthly pending listings from the preceding period (Table 1). Only one month in advance was projected due to the uncertainty surrounding the COVID-19 pandemic and the availability of reliable and timely data. Texas sales are expected to decline 2 percent from December 2020. At the metropolitan level, transactions are predicted to flatten in Dallas and San Antonio but may increase 1.7 and 1.6 percent in Austin and Houston, respectively. On the bright side, activity relative to January 2020 was largely positive across the state and in each of the major MSAs, corroborating strong demand and an overall healthy housing market to start the new year.

Household Pulse Survey

According to the U.S. Census Bureau’s Household Pulse Survey, 8 percent of Texas homeowners were behind on their mortgage payments during December, greater than the national share of 7 percent (Table 2). Both geographies, however, registered a decrease in the proportion of households delinquent on their mortgage payments from the previous month; this was also true of DFW and Houston, where 6 and 12 percent of households were not caught up on their mortgages, respectively. Twenty-two percent of the Texas respondents who were not current expected foreclosure to be either very likely or somewhat likely in the next two months compared with 18 percent nationwide (Table 3). Those delinquent in North Texas and Houston were overall less at risk of foreclosure than the state average. Since the survey was taken, the Federal Housing Finance Agency extended the foreclosure and REO eviction moratoriums for properties owned by Fannie Mae and Freddie Mac (the Enterprises) until March 31, 2021. Similarly, the Centers for Disease Control and Prevention’s federal eviction moratorium has also been renewed through the end of March. Continued stability in the housing market is essential to Texas’ economic recovery.