From being underwater, shooting up faster than we can see it go, to being many kilometers above water: that’s the best metaphor to describe the dramatic changes in the housing industry and mortgage rates over the last several months. COVID had tanked home sales, but now home prices are experiencing record increases. And even though new construction and the high costs the market has borne out now will slow this trend a little bit, the heat of the market will continue–discouraging some buyers, but incentivizing wealthier buyers (or financial entities) to purchase for long-term value. 

The Real Deal blog points out that although mortgage rates were at record lows at the beginning of 2022, they have increased around 1.5 percentage points since then, “the most rapid increase since 1994. More than half of that rise was in March,” leaving home buyers aghast. Some experts say this shock reflected being “spoiled” by having low interest rates for so long. And even though more homes are being built, the overall supply remains on the low side. Buyers will also downsize their expectations, but keep buying. Inflation and its discontents also play a role. The Fed’s interest rate hike at the beginning of May, a half a point, was the largest in decades, affecting some mortgage products like ARMs and home equity loans. 

So all that said, one tool that the mortgage business absolutely needs to be aware of is data management. That’s right–just as political campaigns, retail and wholesalers, and other persuaders in the market need to know as much as there is to know about people–names, addresses, neighborhood characteristics, ever-changing contact info, preferences and values around countless things–lenders need the data tools to create and build their own relationships. Data append services are critical, helping lenders help their marketing departments and loan officers prospect, acquire, and retain customers.

There’s still a lot of uncertainty and heat in the market to ride out. Such a long period of low rates created far too much demand to keep up with in an efficient or thoughtful way. The involvement of Wall Street financial firms in the family rental market, something many would see as an anomaly, further heated up the market. In the eyes of some lenders, the mortgage industry “has come to a screeching halt.” Of course, it hasn’t in reality. People are adjusting downward or taking their time a little more, and some people may be bailing on a market they probably couldn’t have afforded to engage in the first place. What’s clear is that we’re in uncharted territory. 

As coaches are fond of saying to competitors, there’s so much we can’t control, so let’s control what we can. What can be controlled is relationships with prospective clients, new clients, and long-established clients. Accurate information is key to maintaining and growing those relationships.