Who is the online mortgage applicant?

Who is the online mortgage applicant?

Over the past few years, there has been a shift in where new homeowners start the mortgage application process. Traditionally, Americans would go into a local branch and speak with an agent to get things started. But now that US banks have closed more than 2,600 branches over the last 12 months, more people are going online to apply for home loans.

According to Hitwise data, there are 4.4 million people searching for mortgages online, which grew +18% year-over-year.

To better understand who today’s online mortgage applicant is and what drives them to apply online, let’s dive into some audience segmentation and search insights.

1. Profiling the online mortgage applicant

People applying for mortgages online are more likely to live in areas where bank branch closures are on the rise. In major cities, like Denver, San Diego and Boston, bank branch closures are higher and so more residents of those areas are applying for mortgages online. People in Austin are 37.4% more likely to search for mortgages online than the standard online population.

DMA Index of Mortgage Seekers
Source: Hitwise, US. Likelihood of“mortgage” seekers to live in DMA – read as: Austin residents are 37.4% more likely to seek mortgages online, 8 weeks ending 8/24/19. 

The largest segment of people searching for mortgages online are 55-64 years old earning +$100K income. However, the fastest growing segments are getting younger and earning less.

The newest generation to come into buying homes are Millennials (25-44 years old). They comprise a large segment of online mortgage applicants and continue to grow at +21% YoY.

The spread of age demographics shows that Americans are buying homes later in life, or perhaps refinancing mortgages and buying second homes. Just 1 in 3 Millennials own a home, which is 8-9 percentage points lower than previous generation’s homeownership rates. The rise of 45-54 year olds seeking mortgages online confirms that there is greater interest from middle-aged groups.

Age Distribution of Mortgage Seekers
Source: Hitwise, US. Share of “mortgage” seekers by age, 8 weeks ending 8/24/19. 

Mortgages are becoming more accessible for lower-income households, and so there is high growth in applicants online among individuals earning between $50-99K. Even people earning under $20K are seeking information on mortgages and sites like SoFi are making it possible for these individuals to become homeowners.

Income Distribution of Mortgage Seekers
Source: Hitwise, US. Share of “mortgage” seekers by income, 8 weeks ending 8/24/19. 

2. Understand where & why they apply online

The highest share of downstream traffic from mortgage related searches is going to information sites, like MortgageCalculator.org and NerdWallet. Plus, traffic to information sites has grown +127% YoY and 6 of the top 20 mortgage searches include “calculator.”

While comparison sites like Lending Tree and Bank Rate still receive a sizable share of traffic, they are becoming less popular over time. Visits to these sites declined -24% YoY while visits to traditional lenders increased +31%. Bank of America increased downstream traffic share by +162%, driven by a 3x increase in searches for “bank of america mortgage rates” year-over-year.

Downstream Traffic Share of Mortgage Searches
Source: Hitwise, US. Downstream traffic share from searches containing “mortgage” 12 weeks ending 8/24/19. 

Another reason there are more online applicants is because more people are searching on the go. 49% of “mortgage” searches occurred on a mobile device, with total visits from mobile users increasing +95% YoY.

3. Determine when they complete the application

Home buying season is generally from April – July, the time of year when more than 40% of a year’s housing transactions occur. For Quicken Loans, visits to the application page occur most in June and July but conversion rates are highest in May when overall applications are below average. Application page visits are also high in March, although conversions are fewer. One way to seize on higher conversions during May is to begin promotions earlier in a month like March or April when more home buyers are seeking home loan applications.

Quicken Loans Mortgage Conversion Trend
Source: Hitwise, US. Number of visits to application page on quickenloans.com compared to conversion rate (number of visits to completed application page/number of visits to application page).

We’ve learned that the online mortgage applicant is:

  • Getting younger and earning less
  • Lives in areas with higher rates of bank closures
  • Looking for information first and then ready to start applications
  • Ready to apply for a mortgage in late spring, early summer

Leveraging these insights can help banks and other lenders target their marketing strategy to reach the online mortgage applicant as they research online.

For more insights on financial services, please read our latest US Finance Report.

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