After months of plummeting, mortgage and home equity marketing via direct mail campaigns is finally leveling off, and according to the Chicago-based direct marketing firm ""Mintel Comperemedia"":http://www.comperemedia.com, this detail points to a turnaround in the housing industry.
The company 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 seven million for home equity products.
Mintel Comperemedia says 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 direct mail marketing. By comparison, in Q1 2009, the total number of mortgage and home equity direct mailings tracked by Mintel Comperemedia was 84 percent lower than the volume seen in Q1 2007.
Stephen Clifford, VP 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,"" Clifford said. ""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.""
Reduced home values and an increase in foreclosures have dried up the once-robust home equity market, and Mintel Comperemedia says lenders have dramatically changed their direct mailings to better suit today’s market. In Q1 2009, 83 percent of secured loan direct mail offers promoted mortgages only, up from 65 percent in Q1 2007. Adjustable rate mortgages (ARMs) have also fallen out of favor in direct mail. Mintel Comperemedia reports that only 15 percent of mortgage direct mailings advertised ARMs during the first three months of 2009, down from 38 percent in Q1 2007.
Clifford commented, ""Today’s direct marketing shows lenders taking a more prudent, conservative approach to mortgage and home equity lending. 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.""