A Mortgage Marketing Opportunity
The Federal Reserve stated recently that interest rates will be kept low for the next two years. This window of mortgage rate stability presents a golden opportunity for mortgage marketers.
One of the risks of investing time and money into mortgage marketing campaigns comes from the fact that mortgage rate fluctuations can dramatically impact volumes. For example, a mortgage company can invest heavily in a refinance marketing campaign, but if interest rates spike two percent for the duration of the campaign results then results will be poor.
With this commitment to rate stability for the next two years, that risk has been removed and mortgage marketers can now plan and execute marketing campaigns knowing that the results will not be negatively affected by unexpected swings in mortgage rates.
Why is this extended time period important?
Marketing purchase mortgage loans to home buyers requires a long lead time. The National Association of Realtors (NAR) has done studies of first time home buyers showing that buyers can take up to a year from the time they first make an inquiry and become a sales lead until the time they actually purchase and close on a home. That means if a mortgage marketer wants to build a purchase loan marketing campaign it will take up to a year to start seeing the most effective results.
For refinance campaigns, rate stability will help smooth out mortgage sales volume because refinancing home owners will inquire about rates, become a lead, apply, lock their rate and close while rates stay the same. Refinance leads will be less likely to wait to apply hoping for even lower rates or cancel rate locks if rates plummet after locking their mortgage rate.
Mortgage marketing will be a little easier with mortgage rates holding stable, but the challenges of high unemployment, low purchase demand and decreasing valuations still remain. At least mortgage rate risk has been removed as a risk factor.
