December 20, 2002
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INTRODUCING TLTA DOWNDATE |
Welcome to the first issue of
TLTA DOWNDATE! In keeping with TLTA's goal of communicating more frequently to
our members, we are introducing this electronic newsletter, designed to provide
you with association and member news, updates, event and meeting information, as
well as the latest industry hot topics and issues. We want to be able to
communicate substantive information to YOU the members of TLTA in a timely,
cost-effective manner.
One of the important goals of TLTA DOWNDATE is to educate and inform
our members. We hope to spotlight timely topics and issues related to the title
industry that affect your business, your employees and your customers. I know
there are many of you who have written articles for other publications and for
past issues of TLTA News. I would like to invite you to consider writing an
article for TLTA DOWNDATE. By sharing your expertise and experience, we will all
benefit. If you are interested in contributing an article, regular column, or
other item of interest, please contact
On behalf of the TLTA staff, I would
like to wish you a joyful holiday season, and a peaceful and prosperous New
Year. And, if you have ideas or suggestions on how we can improve and enhance
our communication efforts, please let us know!
TLTA Executive Vice President
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ARTICLES OF INTEREST |
REAL ESTATE EFFECTS RIPPLE THROUGH
The real estate agent, the developer, the construction contractor and all the subcontractors who helped build the house, lumber businesses, landscape professionals and furniture stores are a few of those who increase their business with each home sale. In turn, those businesses pay their employees and suppliers who then spend their money, leading to more jobs in the goods and services sector.
The sale of an existing house also creates ripples as the lender, the title company, the home inspector, the real estate firm and others benefit directly from the sale. The money they earn is then pumped back into the economy.
M.A. Anari and Charles E. Gilliland, economists with the Real Estate Center at Texas A&M University, report that for every 100 jobs created in real estate, 128 jobs are created in other areas. In 2000, there were 344,343 people working in Texas real estate jobs including part-time workers.
Money spent by real estate workers raises personal income statewide. Anari and Gilliland report that for every $100 increase in the income of employees of real estate firms, Texas’ total personal income increases by $302.
Real estate transactions have a larger impact in Texas than they do nationally. Real estate accounts for 1.3 percent of the state’s wage and salary employment, compared with a national average of 1.1 percent.
Texas public schools are funded in large part by property taxes, which means education quality is linked to real estate values. In 1999, the Texas Comptroller’s Office estimated the market value of all taxable real estate at more than $768 billion or more than $36,000 per Texas resident.
Real estate owners paid an estimated $12 billion in school taxes in 1999. This money went for teachers’ salaries, teaching materials and building construction and maintenance among other things. In other words, this money also helps fuel the Texas economy.
Effects of real estate on the Texas economy and
comparisons to other states can be found in Economic Impact of the Texas Real
Estate Industry, a report by Anari and Gilliland. Free copies of this report can
be downloaded from the Center’s website http://recenter.tamu.edu
by clicking
on publications and typing in the name of the report in the search box.
MORTGAGE REFINANCING ACCOUNTS FOR 20 PERCENT OF REAL ECONOMIC GROWTH
SINCE 2001
WASHINGTON, DC – ALTA NEWS
An
unprecedented boom in mortgage refinancing that started in 2001 has helped keep
the economy moving, igniting 20 percent of the real growth in the nation’s
gross domestic product, according to a new study commissioned by the
Homeownership Alliance.
Written
by Mark Zandi, chief economist and co-founder of Economy.com, the new study is
the first to analyze the impact of the post-2001 mortgage refinancing boom on
national, regional and local economic growth. Over the past two years, fixed
mortgage rates have fallen to a 40-year low of nearly 6 percent and rates on
adjustable mortgages have fallen to a record low of just over 4 percent. As a
result, millions of homeowners have refinanced their mortgages, providing
borrowers and the economy with more than $274 billion in interest rate savings.
“Last
year’s recession would have been substantially more severe and this year’s
recovery stalled if not for the strength of these markets. Mortgage refinancing
now accounts for an astounding 20 percent of real gross product growth. Since
the refinancing boom began two years ago, close to $2.5 trillion in mortgage
debt has been refinanced. That’s nearly half of all mortgage debt
outstanding,” said Zandi
The
study also estimates $1.24 trillion in mortgages will be refinanced this year,
accounting for nearly 20 percent of all mortgage debt outstanding. This is in
addition to the $1.2 trillion refinanced in 2001. The study analyzes how
refinancing activity impacts the economy and quantifies its national and
regional economic impact.
“While
the stellar economic contribution of housing during this economic downturn has
been well documented, the contribution of refinancing activity has not. This new
study examines a crucial element of the housing industry that is having a
profound impact on the economy,” said Rick Davis, President of the
Homeownership Alliance.
“The
finding that mortgage refinancing is driving the economy—accounting for 20
percent of the growth of real gross product—is further proof housing is a
vital national priority that creates value and builds wealth. Refinancing is a
major component of housing’s important contribution to the economy and
positively impacts individual homeowners by providing a method for raising cash
in difficult economic times,”
The
refinancing boom has provided a much-needed boost across the country. Every
region is benefiting, but some regions are receiving more impact from the
refinancing boom. The most significant economic contribution from refinancing
has been in the Northeast and on the West Coast.
In
particular, over the past two years, the refinancing boom has generated more
than $64 billion in cash in the Northeast and $63.3 billion in the Pacific
region. Other regions getting a boost from refinancing are the
The
housing and mortgage markets have been instrumental in supporting the broader
economy, and refinancing has provided an instrumental element for the
industry’s success. The contributions of refinancing activity to the economy
are numerous. For example refinancing allows homeowners to:
- lower
their debt payments,
- raise
cash to finance more spending,
- restructure
their liabilities by reducing higher–cost liabilities and
- lock
in historically low long-term interest rates.
Many
homeowners have found their interest rate savings on their new refinanced
mortgages are so substantial they are able to do all of these things.
According
to Zandi, housing’s contribution to the economy will continue in 2003. “Even
if mortgage rates do rise in 2003, the economic benefits of the current
refinancing activity will linger on for some time. The refinancing boom is
largely responsible for allowing households to insulate themselves from the
potential negative financial impact of rising interest rates,” he said.
“Home
sales and mortgage origination volumes have never been stronger and
single-family homebuilding and house price gains are as strong as they have been
in a quarter century,” Zandi said.
Source:
Homeownership Alliance
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MARK YOUR CALENDAR! |
JANUARY
MEETINGS AND SEMINARS
The Agent Section of the Texas Land Title Association will meet on
The Houston Regional Seminar will be held
Mark your calendars for
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TLTA BYLAWS CHANGE |
On
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IN MEMORIUM |
Philip
McCulloch
TLTA Past
President Philip McCulloch passed away
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TLTA |
The TLTA Board of Directors, at the recommendation of the Strategic Planning Committee, recently adopted the following mission statement for the organization:
- To provide legislative and regulatory representation, gather and disseminate information, provide education, and enhance the value of the title insurance industry.
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PUBLICATIONS |