16TH ANNUAL HOME EQUITY LENDING MONITOR (Nov 2016)

– “Banks Ramp Up Push for Home-Equity Lines” – The Wall Street Journal, March 26, 2016

 

– “Home Equity Credit Lines Boom 20% in 2015” – USA Today, March 28, 2016

Strategic Issues in the Home Equity Market

  • For retail banks, the home equity market is extremely important.  It is an attractive market in terms of the types of borrowers it draws – serious, upper- income consumers.  Delinquencies are low compared to other forms of lending.  For both borrowers and lenders, it is a win-win.
  • This monitor has tracked ongoing trends and new developments in the home equity credit market over its various waves since its inception.  A primary objective each year is to gauge the overall size of the market – as defined by current users and prospects.  Recent findings have suggested an improving market in conjunction with a recovering housing market; ongoing analysis of that trend is of critical importance.
  • Key measures assessed over time include activation and utilization rates of revolving equity lines, the purposes of using loans and lines, important criteria in choosing providers and products, response to fees and other pricing, and channel usage for marketing, acquisition, and customer service.  Of special interest is ongoing analysis of the perspectives and intentions of equity credit ex-users, with an emphasis on strategies and tactics for re-marketing. 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 2015) revealed that the proportion of homeowners who have home equity credit has been stable.

HELM 2016 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 sixteenth 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 27, 2016 – Final acceptance of comments on questionnaire.

May 27, 2016 – Charter fee/ Intro pricing date.

November 2016 – 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.