Real estate is hot and so is real estate lending. Last year, in a down economy,
first mortgage lending set an all time record of $2.1 trillion. In credit unions,
first mortgage originations in the first quarter are exceeding the pace of the
fourth quarter. For all of last year credit unions made a record, $46 billion,
in first mortgages.
Low interest rates, good weather and a robust housing market have led to instances
of prices selling above list and multiple bids for new listings in select suburban
markets. The boom in real estate values contrasts with the stock market which
has had two consecutive loosing years. By contrast owner occupied real estate
has increased in value every year since 1994.
This rise in value has helped to offset the fall in household net worth impacted
by the decline in the equity markets. Douglas Duncan, chief economist at the
Mortgage Bankers Association, calculates that over $80 billion has been taken
out of housing values via refinancings. Some of these funds have been spent
and some have been used to payoff debt.
So, is the housing boom coming to an end? If the economy continues to recover,
will interest rates follow? What role can credit unions expect to play in real
estate financing this year.
Douglas Duncan, one of the nation's leading experts on all aspects of mortgage
activity, will speak to credit unions at the annual Financial Strategies Conference
in July at Carmel Valley Ranch, Ca