Credit Union Mortgage Market Share Surges To 6%

The industry is poised to benefit from its growing momentum.


Third quarter data for 2011 is in, and the numbers reflect an industry that is committed to promoting economic prosperity in communities across the United States. Credit unions are lending despite the broader economic conditions, are reaching disenfranchised consumers, and are returning value to their member-owners. Credit unions recorded their highest ever market share for first mortgage originations. At 6%, year-to-date market share for first mortgage originations is even greater than that recorded at the trough of the recession, when credit unions were one of the few financial institutions still actively lending. Through the first three quarters of 2011, the industry originated a total of $54.4 billion, giving members access to record-low first mortgage rates. Credit unions have been especially assertive in their refinancing strategies, which sets them up to take advantage of the opportunities presented through the new Home Affordable Refinance Program (HARP) guidelines.

Credit Union First Mortgage Market Share, 3Q 2011

Click on graph for larger image  |  Source: Callahan & Associates' Peer-to-Peer

On the deposit side of the balance sheet, credit union membership increased 0.7% year-over-year and share drafts increased 3.2% year-over-year as members opened 137,000 checking accounts. This trend suggests existing members are turning to credit unions for core deposit products and making cooperatives their primary financial institution.

3Q 2011 YOY Core Deposit Growth

Click on graph for larger image  |  Source: Callahan & Associates' Peer-to-Peer

Today’s consumers want a relationship, not just a transaction, and creating an environment that values relationships over transactions is giving credit unions unprecedented momentum. During the third quarter, the credit union movement, which has $964.2 billion in assets, posted a 32-basis-point increase in pre-assessment earnings. 

“The core earnings engine seems to be back,” says Jay Johnson, executive vice president of Callahan & Associates. Earnings have rebounded to near-normal levels, and total capital, which includes the net worth and loan loss account, now exceeds $107 billion.

This growing momentum will provide members even more value in 2012.

“Already we are seeing these nine-month results confirmed with announcements of record-setting patronage dividends for 2011,” Johnson says. “Credit unions continue to provide members unique value in multiple ways. That is the advantage of the cooperative model.”