Conventional wisdom says spring and summer are the busiest seasons for the US housing market, and the numbers back this up. Typically, several months pass from when a buyer first compares mortgage lenders to when they close on a home loan. Therefore, lenders must prepare well in advance to ensure they encounter buyers at the moment of intent—the moment they begin comparison shopping.
Mortgage Originations Peak in Summer, Searches Peak Late Spring
June, July and August are the 3 busiest months for mortgages, accounting for 28% of originations in each of the last 5 years, according to the Consumer Financial Protection Bureau. Zooming out, the 6 months from May to October account for 54%-55% of originations. In other words, mortgage originations are roughly 20% higher in the warmer half of the year than in the colder half.
The average mortgage takes 45 days to close, according to Ellie Mae’s latest Origination Insight Report. Not all that long ago, mortgage providers could rely on brand awareness to get borrowers through the door. But millennials, the cohort born between 1980 and 1999 who now constitute the biggest group of home buyers, are 46% less likely than baby boomers to stay loyal to their existing lender, a 2018 Velocify survey found. These days, borrowers are 3.7 times more likely to find their lender through online research or social media than 5 to 10 years ago, according to the survey.
What the survey didn’t mention is that borrowers start comparing lenders weeks, and sometimes months, before making a decision. The volume of Google searches for “best mortgage lenders” rose 211%108% between 2010 and 2018, Natural Intelligence has found. Searches peaked in January and February each year, presumably as people focused on New Year’s resolutions and financial planning. Searches fell around 25% in March and April, then climbed around 10% to a second, smaller peak in May, June, and July, before ebbing away from August to December.
Challenge #1: Attracting High-Intent Users in the Peak Months
We can conclude from the above that the highest number of borrowers reach the point of purchase intent in May, June and July. This is important when looking through the lens of intent marketing, a form of digital marketing that prioritizes user intent over user demographics.
What do mortgage lenders need to do to reach home buyers at the moment of purchase intent? For a start, it pays to know your target audience. As mentioned, borrowers are becoming more aware of the power of comparison shopping. Increasingly, borrowers are starting their research by searching for “best mortgage lenders” and “best home lenders,” and not for specific lender brands.
The popularity of non-branded search terms carries a hefty price tag for lenders. According to Natural Intelligence’s “Intent Marketing Trends in Consumer Finance 2019” eBook, non-branded queries like ‘“best mortgages” and best home loans” have an average cost-per-click (CPC) of $13.55. This makes them almost 7-times more expensive than top branded queries like “Bank of America home loans.”
Paying for high-intent consumers is worthwhile if you have a good conversion strategy (more on that in the next section). But there are a few easy steps lenders can take to attract potential users for free – moving up the search rankings to organic clicks.
For starters, mortgage brands must ensure their websites load quickly and provide good user experience. Google recognizes that users have little patience for slow and poorly designed sites, and ranks these sites lower on search engine results pages, according to Michal Nassimian, Natural Intelligence’s Head of SEO. The mobile version of a website is just as important as the desktop version now that Google is rolling out mobile-first indexing—which ranks pages by their mobile version.
Challenge #2: Inspiring Users to Convert (i.e. To Take Out a Mortgage)
As Google’s algorithms become more sophisticated, there is a growing synergy between content that gets users in the door and content that converts. This isn’t surprising, given Google’s mission is to direct users to websites that best address their search queries.
Engaging content that educates, entertains or otherwise gives value to users , helping them in their mission to compare lenders, offers the best odds of converting.
In “Intent Marketing Trends in Consumer Finance 2019” eBook, Natural Intelligence revealed some of the subtle differences between what inspires borrowers to action in the mortgage industry as compared to other lending industries, such as personal loans.
When it comes to mortgages, Natural Intelligence has found that the more interactive a page the better. For example, quizzes that take into account the user’s responses to yield the best lenders or home loans have a 10% better clickthrough rate than a regular chart page. How-to guides like “How to get a mortgage with low credit” or “How to get a mortgage if you’re self-employed” also convert well.
Once a website is functioning smoothly, filling it with content that addresses users’ queries improves the odds of attracting high-intent visitors. Great content is not all about text. Images, videos, charts, diagrams, and quizzes all enrich the visitor experience. In the case of mortgages and other types of consumer lending, Natural Intelligence has found that companies that are transparent about rates and fees generate higher-quality leads than companies that hide this information.
More than anything else, home buyers want to compare rates. All other things remaining equal, pages that display rates offer a better chance of converting than pages that don’t.
Even seemingly subtle differences go a long way: for example, changing the call-to-action button from “get started” to “get my rate” can dramatically improve clickthrough rates.
Conclusion: Preparation is Key
Good results start with thought out actions – and now is the time to start. Devise a clear strategy to attract high-intent users. Make sure you plan for an AdWords campaign targeting the right keywords. Budget your plan accordingly. By and by, see what you can do to improve organic search results: from a swiftly running site through to the right content for your audience, make sure you better your chances to be featured highly in search engine results. Optimize your website, creating great content, or displaying APRs prominently on your home page. By June or July, most home buyers in 2019 will have found their lender and the mortgage market will start getting noticeably quieter until the next summer rolls around. Make the most of now.