ATLANTA -
The findings are part of the Consumer Bankers Association's 20th annual Home Equity Lending Study, which seeks to document the "growth, changing characteristics and use of home equity open-end lines (revolving credit) and home equity closed-end loans."
"Changing interest rates and a shift in the respondent pool contributed to significant changes in this year's findings compared to the 2005 study," the study's authors stated. "Overall, new home equity account bookings were down nearly 5%, with new line account bookings continuing the three-year trend and dropping 24%. Alternatively, new loan account bookings experienced a significant increase of 54%, and overall respondents booked an average of $5.2 billion in new home equity commitments during the study period (a decline of 7% from 2005 averages)."
Brian King, practice manager-consumer lending, with BenchMark, which oversaw the research, said that one notable finding revealed that while marketing efforts increased, response rates were decreasing, perhaps due to market saturation.
"This year we found 24% of respondents participated in pre-approved mailings for loans, which is up from last year's 13%," he said. "Likewise, non-pre-approved direct mail campaigns for loans also increased this year, from 42% in 2005 to 59% in 2006. Overall, this year's respondents reported average response rates amounted to .89% of the households targeted, which is a 27% decrease from last year's 1.22% response rate."
King added that researches expect to see response to marketing and promotion for HELOCs and loans to continue to diminish as interest rates rise.
FOR INFO ON THE STUDY
Visit www.benchmarkinternational.com
