Mortgages By The Numbers (1Q18)

Real estate loans are among the best performing loans in the credit union portfolio. See what happened in the first three months of the year.

 
 

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Total real estate loans at credit unions increased 9.4% over the past 12 months and reached $486.8 billion as of March 31, 2018.

The greater credit union loan portfolio is expanding at a faster rate than in the past. As such, real estate loans accounted for 49.5% of all credit union loans in the first quarter. That’s a drop of 4.1 percentage points compared to the first quarter of 2013, when real estate loans accounted for 53.6% of total loans.

Total real estate loan balances have climbed sharply after holding steady for a few years. They reached $486.8 billion in the first quarter of 2018.

Total real estate loans include both first mortgage and other real estate loans. First mortgage loans made up the bulk, 82.9%, of real estate loans in the first quarter. The annual growth rate for these loans was 10.2%. That’s the fifth consecutive quarter that first mortgage annual growth has reached double digits.

 

 

The majority of first mortgage loans are fixed-rate loans, which made up 57.5% of the first mortgage portfolio. With annual growth of 15.4%, balloon and hybrid loans were the fastest-growing first mortgage loan type.

Balloon and hybrid first mortgages were the fastest-growing first mortgage loan type. Balances for those loans were up 15.4% year-over-year.

Credit unions sold 31.4% of their first mortgage originations in the first quarter to the secondary market. This was 3.4 percentage points lower than one year ago. Industrywide, first mortgage sales to the secondary have decreased in the first quarter since 2015.

Not all asset bands sold originations at the same rate, however. Larger credit unions sold a higher percentage of their first mortgage originations. Credit unions with $1 billion or more in assets sold 32.8% of their first mortgages. Credit unions with less than $100 million in assets sold 16.8%.

First mortgage sales to the secondary market among credit unions has decreased in the first quarter for the past three consecutive years.

Real estate loans are among the best-performing loans in the credit union portfolio. The delinquency for first mortgages was 0.43% in the first quarter of 2018. That was 23 basis points lower than the overall loan portfolio’s delinquency rate.

First mortgage delinquency has decreased every first quarter for the past seven years. Delinquency as of March 31, 2018, was 1.8 percentage points lower than in first quarter 2011. Net-charge offs were also well below the industry average — 0.02% for first mortgage loans and 0.01% for other real estate loans.

First mortgage loan delinquency has markedly decreased since the recession. As of March 31, 2018, the 0.43% delinquency rate of these loans made them among the best-performing loans in the credit union portfolio.

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July 30, 2018


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