15TH ANNUAL HOME EQUITY LENDING MONITOR (Nov 2015)

Strategic Issues in the Home Equity Market

  • The recovering economy coupled with a reinvigorated housing market has resulted in an increase in the prospect market for home equity lines of credit. In its 2014 Home Equity Lending Monitor SYNERGISTICS reported an increase in the number of home equity loan and line of credit prospects.  Recent media reports show that indeed demand for home equity credit is stronger. However, this trend should be monitored closely as events in the landscape could change.
  • It is always important to have a clear understanding of consumers’ shopping and decision making process when marketing home equity credit products. Does the primary checking provider or the mortgage lender have a lock on this market or do consumers do extensive comparison shopping? What product features, provider selection factors, and sources of information and advice are important to consumers? The recovering housing market makes it imperative for lenders to understand consumers’ shopping experience for home equity products.
  • What are consumers’ usage patterns for home equity lines of credit and loans? What are the major purposes for which these credit products are used? Are home improvements, debt consolidation, and emergencies still the top purposes or have consumers broadened their mix of purposes? What impact will upcoming resets on equity lines of credit have on current borrowers? There are a number of important segments in the home equity credit market that providers should consider including holders, prospects, ex-users, inactive holders, and rejecters. SYNERGISTICS survey will provide a greater understanding of the consumer perception and usage of home equity credit.

Key Finding from a Recent SYNERGISTICS Survey:

 Findings from SYNERGISTICS previous reports in the Home Equity Lending Monitor Series (2002 to 2014) revealed that the proportion of homeowners who have home equity credit has been fairly stable.

HELM 2015 Prop Graphic

Research Description and Methodology

The Home Equity Lending Monitor was launched in 2001 to track and measure important issues in the home equity lending market. This current project is the fifteenth in the series. The Monitor features a number of multiphase research elements including a background research, an extensive national consumer survey, a client presentation, and a strategically oriented project report. This annual monitor will benefit the entire home equity team including market research, product management, database marketing, communications and advertising, and risk management.

National Internet Survey – 1,000 total interviews with homeowners including 450 equity loan/line holders and 150 equity loan/line prospects. For comparison purposes, and to permit tracking from previous telephone surveys, the survey will be conducted using a two-prong approach with 80% of the interviews being conducted via the Internet and 20% by telephone.

 

Key Dates and Sponsorship

May 29, 2015 – Final acceptance of comments on questionnaire.
May 29, 2015 – Charter fee/ Intro pricing date.
November 2015 – Project Report available.

 

Strategic Questions

  • Size the home equity market and evaluate trends in a changing environment.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Determine provider selection factors and measure satisfaction with current and/or past equity loan providers.
  • Identify key target markets.
  • Monitor the changing mix of marketing and distribution channels used for home equity lending.
  • Evaluate product features, new product concepts, and pricing structures.
  • Examine the consumer decision making process regarding home equity credit and competing credit products.
  • Identify strategies for acquisition, activation, retention, and remarketing.