In mid-March, the Federal Reserve dropped the target range for its funds rate to 0%-0.25% to combat the economic fallout wrought by the coronavirus pandemic. The move pushed mortgage rates to half-century lowsand, if first quarter data is any indication, spurred a flurry of activity for credit unions nationwide.
For Affinity Plus Federal Credit Union ($2.6B, Saint Paul, MN) that activity has been significant — year-over-year growth in first mortgages for the first quarter of 2020 was more than 23%.
“Our demand has been through the roof since rates dropped in March,” says Corey Rupp, the credit union’s chief lending officer. “We saw record volumes in April, and we expect May to blow the doors off that.”
Initially, approximately 80% of that mortgage activity was in refinancing, Rupp says. In recent weeks, however, that has changed. In late April, purchase applications more than doubled — a trend that has continued into May. The housing market around Affinity Plus has remained strong, which has helped the credit union compensate for declines in consumer activity, but it also raises questions. Namely, how is the homebuying process different during a pandemic?
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