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Mortgages and HELOCs - US - August 2014

Published By :

Mintel

Published Date : Aug 2014

Category :

Banking

No. of Pages : 158 Pages

While most young Millennials – aged 18-24 – are not ready to purchase a home, they soon will be, and it is more important to them to work with a lender they trust than it is to get the best interest rate. This priority differentiates them from older borrowers who historically focus only on interest rates. Lenders need to understand this key difference in order to attract the younger segment.
Table of Content

Scope and Themes

What you need to know
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

Executive Summary

The market
Originations continue downward trend
Mortgage origination industry is deconsolidating
Market drivers
Shrinking unemployment may help housing demand
Figure 1: US unemployment rate, June 2009-June 2014
Home prices are on the rise
Figure 2: S&P/Case Shiller National Home Price Index, March 2009-March 2014
Homeowners are regaining equity
Figure 3: US residential real estate values, mortgage debt, and homeowner equity, 2008-Q1 2014
Millennials are getting ready to buy
Figure 4: Home purchase plans, by generation, May 2014
Leading companies
Figure 5: Change in mortgage origination market share of top five originators, Q2 2012 vs. Q2 2014
The consumer
Interest in online mortgage capabilities
Figure 6: Interest in online mortgage capabilities, by age, May 2014
Most are satisfied with loan interest rate
Figure 7: Any satisfaction with lender, May 2014
Most believe home has increased in value
Figure 8: Attitude toward value of own home, May 2014
What we think

Issues and Insights

Is trust still an issue for the big banks?
Issues:
Implications:
How to increase usage of mobile mortgage apps?
Issues:
Implications:
An opportunity in HELOC resets?
Issues:
Implications:
Is it time for reverse mortgages?
Issues:
Implications:

Trend Application

Inspire trend: FSTR HYPR
Inspire trend: Locavore
Inspire trend: Access All Areas

Market Size

Key points
Residential mortgage originations
Figure 9: 1-4 family mortgage originations, 2007-15
Mortgage origination industry is deconsolidating
Figure 10: Mortgage originations for top originators, Q1 2012-Q2 2014
HELOCs are coming back while balances are paid down
Figure 11: HELOC Balances, Q1 2012-Q1 2014
Mortgage debt continues to decline, albeit slowly
Figure 12: Total outstanding mortgage debt, 1-4 family homes, Q4 2010-Q1 2014
Figure 13: Housing debt vs. non-housing debt, Q1 2010, Q1 2011, Q1 2012, Q1 2013, Q1 2014
Use of reverse mortgages declining
Figure 14: Number of HECMs endorsed by the FHA, 2002-12

Market Drivers

Key points
Shrinking unemployment may spark growth in housing demand
Figure 15: US unemployment rate, June 2009-June 2014
Housing market is strengthening
Home prices are on the rise
Figure 16: S&P/Case Shiller National Home Price Index, March 2009-March 2014
Homeowners are regaining equity
Figure 17: US residential real estate values, mortgage debt, and homeowner equity, 2009-Q1 2014
Housing starts are trending up
Figure 18: Single family housing starts, May 2013-May 2014(p)
Credit is becoming more available
Millennials: Next big market?
Figure 19: Population growth estimates, by generation, 2009, 2014 and 2019
Figure 20: Home purchase plans, by generation, May 2014
Aging of America
Figure 21: US population by age, 2009, 2014 and 2019
Dodd-Frank legislation will make it harder to get a mortgage
Cash sales are 40% of the market

Innovations and Innovators

Key points
Chase My New Home(SM) app
NextJob helps banks help delinquent mortgagees
Re/Max Northern Illinois introduces advanced mobile app
LendingTree launches new mortgage shopping option
Wells Fargo launching a new HELOC product

Marketing Strategies

Key points
Overview of the brand landscape
The growth of incentives
Figure 22: Capital one bonus mile refinancing direct mail ad, 2014
Figure 23: Discover $25,000 sweepstakes mortgage offer email ad, 2014
Brand analysis: Wells Fargo
Figure 24: Wells Fargo brand analysis
Online
Figure 25: Wells Fargo My FirstHome (SM) trailer
Social media
Video
Figure 26: Wells Fargo home preservation workshop video, 2012
Figure 27: Wells Fargo neighborhoodLift (SM) program video, 2014
Direct mail
Figure 28: Wells Fargo mortgage/purchase and renovate loan direct mail ad, 2014
Figure 29: Wells Fargo mobile mortgage app direct mail ad, 2014
Figure 30: Wells Fargo Home Rebate Card direct mail ad, 2014
Email
Figure 31: Wells Fargo online mortgage capabilities email ad, 2014
Figure 32: Wells Fargo mortgage review email ad, 2014
Brand analysis: JPMorgan Chase
Figure 33: Chase brand analysis, 2014
Online
Social media
Video
Figure 34: Chase introduction to buying a home video, 2013
Figure 35: Chase 15- vs. 30-year mortgage video, 2013
Direct mail
Figure 36: JPMorgan Chase automatic mortgage payment direct mail ad, 2014
Figure 37: Chase Mortgage/Mynewhome app direct mail ad, 2014
Email
Figure 38: Chase My New Home (SM) email ad, 2013
Figure 39: Chase mortgage email ad, 2014
Mobile
Figure 40: Chase mortgage mobile ad, 2013
Print
Figure 41: Chase My New Home (SM) print ad, 2013
Brand analysis: Bank of America
Figure 42: Bank of America brand analysis, 2014
Online
Social media
Video
Figure 43: Bank of America rent vs. buy video, 2014
Figure 44: Bank of America refinancing video, 2013
Direct mail
Figure 45: Bank of America relationship credit direct mail ad, 2014
Figure 46: Bank of America refinancing direct mail ad, 2014
Figure 47: Bank of America refinancing email ad, 2014
Brand analysis: Quicken Loans
Figure 48: Brand analysis, Quicken Loans
Online
Social media
Video
Figure 49: Quicken Loans random acts of saving you money video, 2014
Figure 50: Quicken Loans Abraham Lincoln car chase television commercial, 2014
Figure 51: Quicken Loans hole-in-one promotion television ad, 2014
Direct mail
Figure 52: Quicken Loans smart reasons mortgage direct mail ad, 2014
Figure 53: Quicken Loans prequalification letter direct mail ad, 2014
Email
Figure 54: Quicken Loans mortgage email ad, 2014
Figure 55: Quicken Loans mortgage calculator email ad, 2014
Online ads
Figure 56: Quicken Loans jumbo mortgage loan online ad, 2013
Figure 57: Quicken Loans underwater mortgage loan online ad, 2014
Mobile
Figure 58: Quicken Loans mortgage first mobile ad, 2014

Homeownership Rates

Key points
Most people own their home
Figure 59: Ownership of primary residence, by gender, May 2014
Age 25 is the turning point for home ownership
Figure 60: Ownership of primary residence, by age, May 2014
Homeownership jumps at household income of $50K
Figure 61: Ownership of primary residence, by household income, May 2014
Homeownership is highest among Whites
Figure 62: Ownership of primary residence, by race/Hispanic origin, May 2014

Do Renters Plan to Purchase?

Key points
Most renters have no immediate purchase plans
Figure 63: Renters\' intent to purchase, by gender, May 2014
Older Millennials are a prime mortgage target
Figure 64: Renters\' intent to purchase, by age, May 2014
Half of higher-income renters plan to purchase a home soon
Figure 65: Renters\' intent to purchase, by household income, May 2014

Type of Loan Held

Key points
Most homeowners currently have a mortgage
Figure 66: Type of loan held, by gender, May 2014
Home equity loans most popular among Millennials
Figure 67: Type of loan held, by age, May 2014
Young men most likely to have HELOCs
Figure 68: Type of loan held, by gender and age, May 2014
HELOCs most popular among high household incomes
Figure 69: Type of loan held, by household income, May 2014

Source for Finding Current Mortgage Lender

Key points
Personal relationships are more effective than mortgage ads
Figure 70: Source for finding current mortgage lender, by gender, May 2014
Young people rely less on banks to find their mortgage
Figure 71: Source for finding current mortgage lender, by age, May 2014
Income plays almost no role
Figure 72: Source for finding current mortgage lender, by household income, May 2014

Loan Application Plans/Use of Apps/Mortgage Experience

Key points
The challenge for primary banks
Figure 73: Loan application plan/use of apps/mortgage experience, by gender, May 2014
Millennials most likely to be in the market for a HELOC or home equity loan
Figure 74: Loan application plan/use of apps/mortgage experience, by age, May 2014
Income plays a role in plans to apply for a HELOC or home equity loan
Figure 75: Loan application plan/use of apps/mortgage experience, by household income, May 2014
Hispanics more likely to be in HELOC market next year
Figure 76: Loan application plan/use of apps/mortgage experience, by race/Hispanic origin, May 2014

Important Factors When Choosing a Mortgage Lender

Key points
Primary goal: Getting the lowest interest rate possible
Figure 77: Any important factors when choosing a mortgage lender, by gender, May 2014
For young people, trust is more important than cost
Figure 78: Any important factors when choosing a mortgage lender, by age, May 2014
Amount of down payment most concerning to young women
Figure 79: Any important factors when choosing a mortgage lender, by gender and age, May 2014
Bundled products more likely to appeal to higher-income households
Figure 80: Any important factors when choosing a mortgage lender, by household income, May 2014
Blacks more interested in mobile capabilities
Figure 81: Any important factors when choosing a mortgage lender, by race/Hispanic origin, May 2014
Bundled products sway two thirds of mortgage customers
Figure 82: Important factors when choosing a mortgage lender, by source for finding current mortgage lender, May 2014

Customer Satisfaction

Key points
More satisfied with interest rate than closing fees
Figure 83: Any Satisfaction with lender, by gender, May 2014
Satisfaction with loan officer advice is not high
Figure 84: Any Satisfaction with lender, by age, May 2014
Satisfaction with interest rates higher than with customer service among highest household incomes
Figure 85: Any Satisfaction with lender, by household income, May 2014
Overall, Blacks more satisfied than Whites
Figure 86: Any Satisfaction with lender, by race/Hispanic origin, May 2014

Consumer Attitudes about the Value of their Home

Key points
Most believe their home values have increased
Figure 87: Attitudes toward value of own home, by gender, May 2014
For most homeowners, their home is not their largest financial investment
Figure 88: Attitudes toward value of own home, by age, May 2014
Higher household incomes more likely to believe their home value has increased
Figure 89: Attitudes toward value of own home, by household income, May 2014
Blacks are twice as likely as Whites to believe their home is worth less now
Figure 90: Attitudes toward value of own home, by race/Hispanic origin, May 2014

Attitudes about Area Home Values

Key points
Most are optimistic about home values
More optimists among aged 55+
Figure 91: Attitudes toward area home values, by age, May 2014
More optimism among people with higher household incomes
Figure 92: Attitudes toward area home values, by household income, May 2014
Optimism about the value of homes differs by race/ethnicity
Figure 93: Attitudes toward area home values, by race/Hispanic origin, May 2014

Appendix – Other Useful Consumer Tables

Homeownership rates
Figure 94: Ownership of primary residence, by gender and age, May 2014
Figure 95: Ownership of primary residence, by five generations groups, May 2014
Do renters plan to purchase?
Figure 96: Renters\' intent to purchase, by gender and age, May 2014
Figure 97: Renters\' intent to purchase, by race/Hispanic origin, May 2014
Most homeowners currently have a mortgage
Figure 98: Type of loan held, by gender and age, May 2014
Figure 99: Type of loan held, by four employment groups, May 2014
Type of loan held
Figure 100: Type of loan held, by race/Hispanic origin, May 2014
Source for finding current mortgage lender
Figure 101: Source for finding current mortgage lender, by gender and age, May 2014
Loan application plan/use of apps/mortgage experience
Figure 102: Loan application plan/use of apps/mortgage experience, by gender and age, May 2014
Figure 103: Loan application plan/use of apps/mortgage experience, by type of loan held, May 2014
Customer satisfaction
Figure 104: Any satisfaction with lender, by gender and age, May 2014
Attitude toward value of own home
Figure 105: Attitude toward value of own home, by gender and age, May 2014
Attitude toward area home values
Figure 106: Attitudes toward area home values, by gender, May 2014
Figure 107: Attitude toward area home values, by gender and age, May 2014

Appendix – Trade Associations

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