August mortgage mail volume highest since May 2008, reports Mintel Comperemedia
Lenders ramp up their marketing efforts to capitalize on a low rate environment
CHICAGO, Oct. 9, 2012 /PRNewswire/ -- The future of mortgage direct mail is looking more optimistic according to new research from Mintel Comperemedia. In August nearly 62 million acquisition offers for mortgages were mailed to US consumers - the highest monthly mail volume total since May 2008. While this figure is still way below the peak (monthly mortgage mail volumes averaged 238 million in 2005), a number of factors hint at a positive outlook for mortgage direct mail.
Senior Vice President at Mintel Comperemedia Andrew Davidson notes:
"The Federal Reserve recently committed to a new round of quantitative easing that will keep mortgage rates low until mid-2015. At the same time, demand for home loans has been improving and housing prices have been stabilizing in various regions across the country. The environment has prompted a number of lenders to ramp up their direct marketing efforts and Discover has entered the market to capitalize on the opportunity."
Discover recently entered the mortgage business when it purchased the Home Loan Center from Tree.com and began originating mortgages under the Discover Home Loans brand. "The move is in line with the company's strategy to reduce its reliance on credit cards and to cross-sell other financial products, such as deposit accounts and unsecured loans, to its extensive credit card base," notes Andrew Davidson. "Discover is not restricted by the baggage of the financial crisis like other lenders." Discover offers mailed to existing customers in August encouraged them to refinance with 15-year fixed rate mortgages with APRs as low as 3.12%. Discover emphasized the historically-low rates as well as 30, 20, 15 and one-year term options.
"Despite an increase in consumer demand, lending standards are still very tight in the mortgage industry as banks remain cautious. The Federal Reserve is committed to kick-starting a housing recovery and mortgage mail volumes are starting to pick up although they are nowhere near the record levels achieved in 2005, during the height of the housing boom," adds Andrew Davidson. "As lenders such as Mortgage Investors Corporation, Quicken Loans and Discover ramp up their refinancing activity other lenders may be forced to respond to counter the threat fueling an increase in competitive activity in the mortgage market."
About Mintel Comperemedia
Mintel Comperemedia® provides strategic solutions for businesses looking to advance and improve their direct marketing strategy. It monitors direct mail, email, print and online advertising targeted at consumers, small businesses and insurance agents across eight industries: credit cards, insurance, telecommunications, banking, investments, mortgage & loan, automotive, and travel and leisure. Mintel Comperemedia helps businesses identify competitor strategies and direct marketing trends, so they can create more effective, informed marketing campaigns. www.comperemedia.com.
Mintel is a leading global provider of market, consumer and innovation research. For 40 years, Mintel has given companies worldwide the best data, the most useful analysis and the smartest business recommendations. www.mintel.com.
SOURCE Mintel Comperemedia
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