Growing your mortgage business in a challenging market

It’s a great time to be a lender in just about any loan category in the credit union industry. Assets, total loans, resi, auto, credit cards, member business loans are all up. Even better news, delinquencies are at cycle lows, so performance is strong due to a healthy economy. The only blinking red light has been loan to share ratios that are at 40-year highs, which gives some concern to liquidity going forward. Deposits are at a premium and their costs are starting to rise.

(Source: NCUA)

However, the long slow uptick in rates has taken its toll on originations, though hopefully the recent pullback in rates helps the refinance market. The continuing rise in home values, coupled with low inventory, has made housing affordability a real challenge for everyday America. The chart below provided by the Urban Institute shows the volumes we’ve experienced over the last few years. Most forecasts call for more of the same for the next 2+ years with originations being flat (at best) around $1.5tn annually.

 

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