Insights
Market reports, forecast data, industry insights, and more from iEmergent.
For this month’s market analysis, we’re headed to the Pacific Northwest to the beautiful Seattle-Tacoma-Bellevue CBSA (from now on referred to as the Seattle market). We might see sprinkles of rain, but we’ll also get to see the whole market from a zoomed-out, space-needle-like view.
Let’s look at mortgage opportunity forecasts (a.k.a., what’s expected to happen in the market) and how data informs lending strategies.
The data and maps in this email all come from iEmergent’s proprietary forecasts, datasets, and analysis tools, which are available in Mortgage MarketSmart. Lenders partner with iEmergent to grow volume, find mortgage opportunity in their communities, target diverse lending initiatives, and so much more.
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While looking at national mortgage forecast numbers is interesting and relevant, there is no uniform U.S. mortgage market. There are 84,414 census tracts and 387 Metropolitan Statistical Areas (MSAs) that make up the U.S.—and each one is unique. We forecast mortgage opportunity at the census tract level where lenders can use that data to make localized decisions.
Since 2010, iEmergent’s forecast has outperformed most predictive analytics from other industries, maintaining an accuracy rate of over 90%, and is backed by a money-back accuracy guarantee*. You can read more about our forecasts here.
Let’s dive into a market to see what’s in store for Seattle in 2024. Where will the loans be? To what borrowers?
The Seattle-Tacoma-Bellevue CBSA includes 1,541,247 households and has a homeownership rate of 60.58%. How do those demographics break down into mortgages? Here’s a look ahead at 2024:
The Seattle market is expected to grow over the next five years, but at a slower pace than the U.S. as a whole.
iEmergent’s Mortgage Velocity Index (MVI) compares a market’s rate of growth in loans over the next five years, compared to the growth rate of the overall U.S. market.
An MVI of 1 means a market is growing on pace with national market growth, so a 0.85 MVI means Seattle is growing at a slower rate than the overall U.S. market.
With slow growth in the market, lenders in Seattle will need to have targeted, data-driven strategies to reach mortgage-ready homebuyers. One way to do that is to use data to find the most relevant real estate partners for our goals.
For example, let’s say we want to partner with real estate agents who have a strong track record with low- to moderate-income (LMI) borrowers in the market.. We can use Mortgage MarketSmart to find the highest-volume—by listings or by dollars—LMI listing agents in the market.
Want to see the names and contact information? Request a Mortgage MarketSmart demo.
Lenders can pass this actionable information to MLOs who can build relationships with these potential partners.
Over the next decade, new households are expected to be mostly households of color. Growth in mortgage lending is possible—and practical—by reaching out to underserved markets. Right now, for Black and Hispanic households in the Seattle market, the homeownership gap is stark.
Homeownership Rates
The overall minority homeownership rate is just 49.74%—more than 10 percentage points lower than the overall homeownership rate.
But it doesn’t have to stay that way. Lenders can use data to reach underserved borrowers by using data to:
If we look at the geographic distribution of loan dollars to borrowers of color, there are clear opportunity zones for each segment.
Loan Dollars - Black Borrowers
Loan Dollars - Asian Borrowers
With an average loan size of $678,529, Seattle is one of the most expensive markets we’ve looked at. Granted, loan size doesn’t equal home price, but there is a correlation—higher home prices equal bigger loans, on average.
High home prices mean lenders need to be purposeful about reaching low- to moderate-income borrowers and helping them become homeowners. These efforts are to help the community, meet CRA lending requirements, and, yes, boost the bottom line.
Here are LMI census tracts in the market:
Imagine having this data (and more!) for your markets. What kind of strategies could you plan? How would your 2024 look different?
Forward-looking data—combined with historic, current data, and innovating analysis tools—set lenders apart. If you want to grow in 2024, let’s talk.
All maps and data in this email are from iEmergent’s proprietary forecasts and Mortgage MarketSmart’s suite of market intelligence tools.
Generally accepted minimum accuracy standards for predictive analytics: 70%.