According to a recent Freddie Mac Economic & Housing Market Outlook report, both the U.S. economy and the housing market are poised for a “robust start” to 2015, with a number of positive economic factors at work.

The U.S. is experiencing approximately 3% annual growth, and the labor market continues to see solid job gains and falling unemployment. In addition, the considerable drop in oil prices has amounted to an unexpected $200 billion consumer spending stimulus.

Home price appreciation has stabilized in recent months after two years of steady gains. The result is a much larger group of Americans with equity in their homes, while affordability ratios still remain within historical norms. For now, interest rates remain low (and have even come down during the past few months), and consumer sentiment continues to improve. This may well equate to larger numbers of household formations and homebuyers.

All of these factors contribute to what is a great opportunity in the housing market for consumers and real estate professionals alike. However, as Freddie Mac makes clear, these opportunities may exist for a limited time only. Let’s not forget that housing also typically surges in the spring and summer months, which are fast approaching.

For real estate professionals – whether Realtors, loan officers, mortgage brokers or investors – it is critically important to be positioned to capitalize on this moment to reap the maximum possible benefit. And, as is so often the case in this industry, the key to being best positioned boils down to being armed with the very best data and information possible.

A fertile market segment

The first few weeks of 2015 saw significant increases in mortgage applications, according to the Mortgage Bankers Association’s Weekly Application Survey. Given the recent drops to 30-year conforming interest rates, it should come as no surprise that the share of refinance applications was up considerably as well. Freddie Mac pointed out in its report, however, that while it expects to see the relatively low interest rates continue through Q2 2015, they may then shift upwards in the second half of the year.

According to an analysis conducted by Black Knight, there are currently approximately 7.3 million borrowers who could still benefit from refinancing their mortgages, and who are good candidates to do so, based upon today’s interest rates, as well as their current notes, credit scores and LTV ratios.

In addition, the same analysis identified another 4.3 million borrowers for whom refinancing is less advantageous – due to already low interest rates – but who have sufficient equity in their homes to consider home equity loans or lines of credit in order to tap newfound equity without refinancing into what would likely be a higher rate on their first lien.

Then, of course, there are the approximately 28% of adjustable-rate mortgages (ARMs) that are poised to reset over the next two years. This equates to some 365,000 borrowers who may want to refinance to a fixed-rate loan while rates are near historic lows. If you add the roughly 640,000 active HELOCs with draw periods that will end in 2015 (and almost another 700,000 the year after that), with monthly payments jumping by an average of $254, this potential refinance market swells further.

Identifying opportunity – one customer at a time

While these circumstances result in an attractive target market, given the limited window of opportunity, the question becomes one of identification and outreach: how does a broker, loan officer or institution find and market to these people? 

The answer is having access to the most robust data sources possible, along with the ability to slice and dice that data to identify current borrowers who could benefit from refinancing or home equity lending. By combining industry-leading loan-level information with the most comprehensive property records data available, identifying potential customers becomes much more of a science than a guessing game.

For example, data from an accurate and timely Home Price Index (HPI) can assess home prices and trends within a given geographic area, while loan-level information on mortgage interest rates, terms, LTVs and unpaid principal balances can help pinpoint prospective customers within those areas. Property records can provide detailed information on existing liens, and automated valuation models (AVMs) can deliver value estimates on individual properties with a very low margin of error.

Used in conjunction with one another, all of these varying and comprehensive data elements help paint a holistic picture of a potential customer, as well as the particular products and services best suited to that customer’s individual situation. The fact is, this sort of data access can generate qualified business leads – and detailed prospect profiles – based on almost any criteria the user wants to define, in order to identify opportunities and act on them.

Avoiding interruptions

This sizeable refinance market aside, the general consensus is still that – like 2014 – the 2015 origination market will be largely driven by purchase mortgages. While Freddie Mac does project overall originations coming in lower ($1.1 trillion dollars in 2015 as compared to $1.2 trillion in 2014), it does anticipate purchase mortgages making up a much higher share of that activity (73% of total originations versus 58% in 2014).  

Keeping this in mind as we transition into the elevated housing activity of the spring and summer months, and remaining cognizant of the relatively limited window of opportunity that exists, it becomes even more important to ensure smooth, uninterrupted transactions. Every party involved in a real estate transaction has a vested interest in ensuring that deals go off without a hitch. At the very least, they need to have a clear picture of just how complex the transaction may turn out to be.

Using property records databases and user-defined criteria, it becomes much easier to construct far-reaching reports on specific properties that can reveal any potential blemishes on the current chain of title while providing comprehensive historical overviews. Title transfers, new liens or defaults – anything that could slow the process of closing on the transaction can be identified and dealt with.

Detailed property reports can also provide a more holistic view of individuals on an existing customer list, facilitating further client outreach opportunities. In fact, the same information in transaction histories – including voluntary and involuntary liens - can support strategies for real estate investors by providing myriad ways of identifying motivated sellers.

A cohesive, comprehensive source for sales lead clarity

While 2015 may not go down in the record books as a breakout year for housing, most indicators point to better activity levels than 2014. The U.S. economy is growing at a respectable rate, consumers are more confident, the job market continues to improve, interest rates remain low – for now – and the decline in oil prices is having the effect of injecting $200 billion in spending ability into the economy.

Increases in home prices have impacted affordability to some degree, but the basic facts point to increased optimism for the housing market and opportunity for those involved in the real estate industry. Americans are gaining equity in their homes – Black Knight finds that over half of all borrowers now have 30 percent or more equity – and this is expanding both the refinance and home equity lending markets. Likewise, most economists expect a steady, gradual improvement in the housing market over 2014.

In order to take advantage of the opportunities in the resurgent housing and mortgage markets, real estate professionals need to first identify where those opportunities reside. A comprehensive, cohesive, single source for the most robust data sets available will not only aid in the identification of opportunities, but also in capitalizing on them.