Historic lows for 30-year mortgage rates, combined with pent-up demand from the early spring, led to 14 consecutive weeks of greater mortgage applications compared to 2019, with activity 33% higher for the week ending August 21, 2020. With social distancing changing the way and where people buy homes, in parallel with job losses impacting those who qualify for mortgages, the housing market has seen its fair share of fluctuations.
The financial services industry continues to face sweeping changes in the housing market for which marketers need to strategize carefully to ensure mortgage business success. Here are some considerations when planning your approach to Fall 2020:
Evaluate advertising campaigns for outflow-inflow real estate markets
Price per square foot in major cities, combined with extended (and sometimes perpetual) remote work approved for some of America’s largest companies, has sparked ideas of moves away from some of America’s largest cities. Redfin observed that 27.85% of its users searched for a new metro area in July 2020, an increase from 27.4% in Q2 2020 and 25.2% in July 2019. Of the top 10 outflow-inflow markets outlined by Redfin, one notable trend is Bay Area residents looking to Sacramento, California and Portland, Oregon given the much larger space obtained for a lower cost.
If your business has mortgage services in key inflow markets, match up interest with outflow markets and consider digital ad campaigns to raise awareness of your services for inflow markets. Look at the segments that are interested in moving to inflow markets covered by your business and work with your media agency and in-house staff to send out test campaigns. Scale up successful approaches that are leading to inquiries and mortgage applications and keep monitoring interest patterns. New destinations can emerge as inflow locations given pricing and availability, and as new housing developments go live. Explore test runs in places your team believes could be new outflow-inflow pairings.
By focusing marketing spend on these groups and personalizing marketing campaigns to only reach hyper-relevant audiences, banks are able to remain profitable and outpace their competition. And in case digital budgets are under scope of cuts later this year, here’s a data point to support why budgets should be maintained and even expanded to keep pace with the market: eMarketer research as of August 2020 anticipates an overall year-to-year increase in digital ad spend by 9.7% to $19.62 billion.
Optimize marketing automation based on varying mortgage timelines
For home buyers, estimates from Credible as of end of July 2020 place the expected timeline of buying a home at approximately 4.5 months, with ranges depending on the speed of multiple steps in the process, from pre-approvals and successful bid to inspections and closing. Placing a successful bid can be challenging in a market with limited housing supply, for which nationwide inventory for single family homes in July was the lowest since at least 1982 when data started tracking. Adapt automation campaigns to take these extended timelines into account when educating first time home buyers on the various steps of the process.
In regards to refinancing, Rocket Mortgage by Quicken Loans states that a refinance process can take approximately 30-45 days based on August 2020 expectations. Review ongoing marketing campaigns that are received by your mortgage customers and look through engagement data for those who recently completed a refinancing process to understand what content resonated and what had minimal engagement. Launches for certain new products and offerings may not be as well received during refinancing, so evaluate adapting message cadence and automation tracks for those who enter the process.
Forbearance timelines can have an extensive range from a few months to almost one year if the conditions of the CARES Act are applicable to the loan in scope. When supporting more-at-risk borrowers, ensure that they are aware of refinancing options, forbearance, and other risk mitigation programs they can partake in to avoid foreclosure. Run test campaigns on offerings that could be of greater interest when navigating a forbearance process. Consider this approach if your bank offers a platform similar to Huntington Bank’s “Heads Up,” a financial management tool in which customers can set up target budgets for category spend and receive alerts (by email, mobile push, or SMS) if spending is approaching or exceeding monthly limits.
Champion digital innovation to strengthen customer engagement
The bar continues to rise in providing digital commerce for real estate. Numerous states have already passed and enacted legislation to permit remote online closings – with others providing temporary permission or evaluating new regulations – in order to finalize transactions. If your company currently operates in any state offering remote online closings and has yet to utilize this capability, explore with the wider business how this approach can blend into your mortgage outreach.
Digital innovation can also be an iteration of ongoing progress. Review top-of-funnel activity and map out the average number of clicks, scrolls, and types to submit a mortgage inquiry. Look at where traffic comes from – whether desktop / laptop, mobile, or tablet. To the extent notable differences in inquiries or applications may be the result of a challenging website experience on one of these channels, advocate for roadmap developments to simplify experience, remove bottlenecks, and reduce friction based on your team’s data analysis.
Finally, although there has been an incredible focus throughout 2020 on enabling digital experiences, there are many customers who would still prefer an in-person banking experience when it comes to making one of the most important financial decisions in their lives. Collaborate with departments across the bank – lines of business, IT, operations – to identify how to continuously streamline in-branch appointments so that loan officers have the most relevant data immediately available and customers have seamless on-site experiences. By enabling personalized experiences, from the first interaction to real estate close, whether fully digital or a blend of online and offline, marketers can best position themselves for achieving mortgage growth.