Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association
Mortgage and Home Equity Direct Mail Down
Lenders pull back as housing slump, credit crunch continue
CHICAGO--2007 showed a sharp decline in mortgage and home equity offers mailed to Americans, according to new findings from Mintel Comperemedia. Lenders sent approximately 2.6 billion direct mail pieces during the year, down nearly a third (30%) from the 3.7 billion sent to consumers in 2006.
“People have tightened up spending, home sales are down, and there’s not a lot of faith in the market,” says Farah Huq, market research manager at Mintel Comperemedia. “With fear of recession and many Americans struggling just to make ends meet, it makes sense that lenders have backed off direct mail advertising for the time being.”
Mortgage mailings dropped by over 34% in 2007 as lenders sent just 1.7 million offers, a notable decline from the 2.6 million sent in 2006. With volatile adjustable-rate mortgages to blame for much of the subprime fallout, lenders have cut back on these offers. Direct mail campaigns for adjustable-rate mortgages declined by 72% from 2006 to 2007. In contrast, safer fixed-rate mortgage offers increased 14% between years.
The home equity category felt the blow as well; lenders cut back offers for home equity lines and loans by 21% in 2007 (930K compared to 1.2 billion in 2006). With home values declining, the potential market for home equity products has shrunk notably over the past two years.
Eight of the top 10 mortgage and home equity mailers from 2006 reduced their total offers sent in 2007. Of those that cut back, half reduced direct mail campaigns by more than 60% from 2006.
“As the housing bubble continues to deflate, we can expect companies to constantly readjust,” comments Huq. “I wouldn’t expect to see dramatic increases in direct mail until the market has stabilized and consumers seem ready. Instead, I think we’ll see internal shifts in the top mailers and the types of offers advertised through direct mail.”
Mintel is a leading global supplier of consumer, product and media intelligence. For more than 35 years, Mintel has provided insight into key worldwide trends, offering unique data that directly impacts client success. Mintel Comperemedia is a competitive media monitoring service that analyzes direct mail, email and print advertising trends. With offices in Chicago, London, Belfast, Sydney and Shanghai, Mintel has forged a unique reputation as a world-renowned business brand. For more information on Mintel, please visit www.mintel.com.
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