Mortgage, home equity direct mail volume flattens out, points to turnaround in housing industry

After months of plummeting, mortgage and home equity marketing direct mail is finally leveling off. Mintel Comperemedia, a service that provides direct marketing competitive intelligence, reports that for the past six months—after more than two years of declines—the number of home loan offers sent to Americans has been flat. From December 2008 to May 2009, lenders sent an average of 38 million direct mailings per month, approximately 31 million for mortgages and 7 million for home equity products.
This steady direct mail volume stands in sharp contrast to trends of the previous three years. As the credit crunch and declining home values dried up the housing market, lenders steadily reduced marketing direct mail. In Q1 2009, the total number of mortgage and home equity direct mailings tracked by Mintel Comperemedia was 84% lower than the volume seen in Q1 2007.
Stephen Clifford, vice president of financial services for Mintel Comperemedia, believes the leveling of direct mail may signal the housing market bottom: “Many experts believe housing is stabilizing, based on indicators such as rising consumer confidence, more housing starts and increased existing home sales in recent months. The leveling off of home loan direct mail is another indicator that America may be reaching the floor of this downturn in the housing market.”
Lenders have also dramatically changed their direct mailings to better suit today’s market. Reduced home values and an increase in foreclosures have dried up the once-robust home equity market. So unsurprisingly, in Q1 2009, 83% of secured loan direct mail offers promoted mortgages only, up from just 65% in Q1 2007. Adjustable rate mortgages (ARMs) have also fallen out of favor in direct mail. Mintel Comperemedia reports that in Q1 2009, only 15% of mortgage direct mailings advertised ARMs, down from 38% in Q1 2007.
“Today’s direct marketing shows lenders taking a more prudent, conservative approach to mortgage and home equity lending,” comments Stephen Clifford. “Low home prices, affordable rates and the homebuyer tax credit are all driving more buyers to the housing market, so the stage seems set for a gradual recovery.”
Reflecting rapid industry changes, Mintel Comperemedia sees different lenders sitting at the head of mortgage and home equity direct mail.