When it comes to Mortgage Lead Lists, you have no further place to look than the experts on the Dataman Group Team.
DataDale’s Mortgage Trends – Looking at 1st Quarter of 2020
According to Freddie Mac’s newest housing market forecast, mortgage rates are expected to remain around 3.8% for all of 2020 and 2021.
That is more than a full point less than the highs we saw in 2018. According to the Mortgage Bankers Association, it is expected that 2019 will turn out to be the best year for refinances since 2016 and current data forecasts that trend to continue through 2020.
By 2021 it’s expected that refinances will start to slow down as most people will have refinanced their higher rate mortgage by then. That means it is imperative that mortgage marketers ramp up for 2020 as this coming year will be a bonanza for those who take advantage of the current economic trends.
On the purchase side, Freddie Mac expects home sales to continue to rise and predicts that 2020 will see even greater activity than 2019.
It’s unknown how long this trend will continue as home prices continue to rise but most forecasters agree that 2020 will be an excellent year for Originations so reaching those Prospective Home Buyers should continue to be a priority.
Home prices continue to rise, but not as fast as they have over the past few years. Many would-be buyers struggle with affordability.
NerdWallet has identified these mortgage trends to watch in the second half of 2019. I have tempered this with the latest info from the National Association of Realtors and Mortgage Bankers Association.
1. Wanted: More homes for sale
In real estate, it’s been a seller’s market since August 2012. More would-be buyers exist than homes for sale. Because of this, sellers have a stronger negotiating position. It’s true that the market still favors the seller in most places. However, the balance of power is beginning to move in the buyer’s direction.
According to the National Association of Realtors, sales of existing homes slid by 2.2% in September. Despite the slide in purchases, inventory levels barely increased. Right now we are at 4.1 months of supply at the current pace of sales. Six months of supply is considered to be normal. Certainly, we haven’t not seen that level for many years.
Even with thousands of homes on the market, there’s still a shortage of homes for sale. Especially when it comes to starter tier supply, which is affecting the fist-time home buyer segment. According to Freddie Mac, until construction ramps up, housing costs will likely continue to rise above income. This constricts household formation and prevents home ownership for millions of potential households.
2. Home prices will keep going up
Many forecasters predicted that home prices will continue to rise in 2020, but at a slower pace.
In the first four months of 2019, buyers paid more for resold homes than a year before.
The NAR predicts that home price appreciation will start to slow down. They believe that year-end prices will be 2.2% higher than at the end of 2018.
Not everyone believes the pace of home prices will slow to end 2019. Fannie Mae has revised its price forecast. However, it still predicts that prices for existing homes will rise 4.3% this year.
3. Mortgage rates will remain low
Fannie Mae, Freddie Mac and the National Association of Realtors all predicted that mortgage rates would rise through 2019. In the first part of the year, mortgage rates tumbled.
The average APR peaked at 5.09% in November 2018. In contrast, the average APR for a 30-year fixed-rate mortgage fell to 4.09% by June 2019. This was a decline of a full percentage point, according to NerdWallet’s daily mortgage rates survey.
Of course, we all know that refi activity depends almost solely on rates. When they rise, activity falls. That was the case in the week ending October 18. The Mortgage Bankers Association of America reported an overall 11.9% decline in applications for mortgages. Again, that was because of the rise in interest rates.
4. Affordability continues to be a concern
Even as home price growth slows and mortgage rates fall, home buyers still have difficulty affording homes. This is especially true for first-timers in the less expensive end of the market.
The truth is that rising prices have offset much of the benefit of lower mortgage rates.
Mark Boud, chief economist for Metrostudy, calls the national housing market “top-heavy.” He means that there are plenty of homes available for buyers who can afford to pay $800,000 or more. But buyers outnumber sellers of homes priced $400,000 or less.
The share of newly built homes under $400,000 has also gone down.
5. More people could save by refinancing
While the drop in mortgage rates benefits home buyers, it’s also good for homeowners who can refinance. This means homeowners can get lower monthly payments by refinancing into a mortgage with a lower interest rate. Every time rates fall, there’s an increase in the number of homeowners who could save money by refinancing.
Black Knight is a technology provider for the mortgage industry. They estimate that 5.9 million homeowners could cut 0.75% or more from their mortgage interest rate by refinancing.
There are lots of great options to locate refinance prospects. You can select homeowners with high rates, VA/FHA Streamlines, HELOC conversions, homeowners with credit card high balances.
Even if you bought your home recently, it’s worth checking whether you should refinance. Black Knight estimates that 953,000 homeowners who got mortgages in 2018 could save an average of $162 each month by refinancing.
6. New homes get bigger
From a home buyer’s perspective, most markets need more houses for sale, and they need to be on the affordable end of the price scale. After all, many first-timers buy starter homes instead of forever homes. The median home size went up in the first quarter of 2019, making first homes less affordable. Nothing says this trend will stop in 2020.
Year-over-year median prices for new homes followed the increase in size, going up sharply in April to $342,200 — an 8.8% increase over the median price 12 months earlier of $314,400.
7. Attention is on first-time buyers
The mortgage and real estate industries are focused on serving first-time home buyers, and for good reason: There’s a lot of pent-up demand.
In 2019,the share of first-time home buyers averaged 33% – which is a drop from the 44% we saw over the past few years. In 2019, the average new home buyer age was 33 – the oldest ever. Mortgage marketers should note that there are millions of millennials reaching their 30s in the next few years. That means market forces could cause the first-timer share to increase again in the coming years.
Among first-time home buyers this year, 32% depended on family or friends for financial help. According to the 2019 Profile of Home Buyers and Sellers, the annual National Association of REALTORS® report, this support came from gifts or loans. Another concern is that Millennial home buyers are more likely than their older counterparts to fund their down payment and closing costs by dipping into retirement savings. A recent study by Bankrate found that 13% of Millennials are doing this. Another fact is that 33% of millennial homeowners say they used a down payment assistance program or grant for their down payment.
Bottom line for the mortgage industry is the fact that they want to buy a home. First-time home buyers, as a whole, rarely put down 10% or more on their first homes. The average first-time home buyer put 6% down, according to the 2019 NARs report, and 25% financed through an FHA loan, which has a more affordable down payment threshold.
8. Sellers – Move-up Buyers or Down-sizers?
According to the NARs 2019 report, 44% of resale buyers traded up to a larger home. They were in their homes 10+ years. The distance between home sold and new home bought – within 20 miles. Real Estate and mortgage marketers can use these demos in their list selection.
Our Mortgage Lead Lists target Top Market Segments
Latinos – According to the National Association of Latino Real Estate Professionals, Latinos were the only demographic group that increased its rate of home ownership for three consecutive years. Latino Home ownership actually accounts for nearly 75% of the net increase in US Home Ownership. This is a key market group that must not be overlooked. Marketers can easily request Hispanic surnames on their mortgage prospect lists.
Millennials – the largest wave of New Home Buyers, representing 33% of last year’s home buyers. Millennials are now reaching peak home buying age. This means that you need to reassess your marketing strategies to accommodate the preferences of Millennials. The First Time Home Buyer list is still the top list for new originations. Read DataDale’s latest article about Marketing Mortgage Products to Millennials.
With a little creativity, Mortgage Marketers can continue to prosper in today’s economy.
Focus your marketing on what would trigger the need for a mortgage
Top List Picks for February, 2020
- First Time Home Buyers – In the first half of 2019, first-time home buyers accounted for 33 percent of the loans used to purchase a single-family home. They also accounted for 39 percent of the sales. These Renters are taking advantage of affordable pricing on homes/condos and low rates on mortgages. Therefore, these are the top prospects for every mortgage company. Some of the elements we use to qualify the data include age, income, marital status, length of residence, ethnicity, modeled credit and geography. Consequently, the First Time Home Buyer overlay really enhances the basic renter data. One more thing to remember. Millennials are aging up. This group will become a massive first-time home buyer segment. The key is marketing credit down payment assistance and credit opportunities.
- Renovation Loan Prospects – People are staying in their homes longer and taking out loans to renovate and remodel their homes. Therefore, many homeowners are making upgrades to their homes to age in place.
- Equity Loan Prospects – Reach Homeowners with high equity in their homes who are carrying high revolving debt balances. Homeowners who are strapped for cash are good prospects for Equity Loans.
- Invitation To Apply Lists – These mortgage lead lists are for those mortgage companies looking for an alternative or supplement to prescreen data. Select options include modeled credit score, household demographics, and property criteria. Click HERE to read about the different between ITA lists and prescreen lists.
We offer mortgage lead lists for:
- Equity Loan Prospects
- FHA / VA Streamlining
- 125% LTV Prospects
- Reverse Mortgage Prospects
- Potential First Time Home Buyers
- Renovation Loan Prospects
- Seller Carry Backs -Private Note Buyers
Select from these high response mortgage lead lists and mortgage marketing list databases:
Have you Read the Mortgage Marketing Blog?
**Read Data Dale’s Blogs for the Mortgage Industry
Marketing Mortgage Products to Millennials – May, 2019
Millennials are the Largest Wave of New Home Buyers – April, 2019
Mortgage Marketing Outlook – 1st Quarter of 2018 – January 2018
Will the Gig Economy Change Mortgage Lending? – August, 2017
Is 2016 the Year for Reverse Mortgages? – published Jan 2016
DataDale’s Mortgage Outlook for 2nd Half of 2016 – published 8/3/ 2016
New Hybrid Marketing Methods for Mortgage Professionals – published 1/15/2015
2015 Marks the Return of First Time Home Buyers to the Marketplace – published 1/2/2015
What We Can Learn from the 2014 Fannie Mae National Housing Study – published 9/29/14
New Home Purchase Leads for Mortgage Brokers & Loan Officers – published 4/1/14
Mortgage Direct Mail – Can It Rebound? – published 8/14/14
Mortgage Mailers – Are You Barking Up The Wrong Tree? – published 9/26/13
How Mortgage Mailers are Generating New Leads with Direct Mail – published 1/16/2014
Click here to read the 2017 Housing Study by the US Census Bureau
Telephone numbers are available on most mortgage lead lists. If you want mortgage telemarketing leads in your market, remember that Federal, State and DMA Do Not Call Lists are flushed from our files. Federal SAN required for all telemarketing lists.