Decreasing mortgage rates during the fourth quarter of 2014 underpinned an increase in total home sales in the United States. According to Freddie Mac, the 30-year fixed-rate mortgage closed the year at 3.86% — that’s the lowest in 2014 and 60 basis points less than December 2013’s year-end rate. Thanks to low rates and an improving economy, total existing-home sales rose 2.4% to a seasonally adjusted annual rate of 5.01 million in December 2014.
For credit unions, members continued to take advantage of the low rates. According to fourth quarter FirstLook data on more than 6,200 credit unions representing nearly 99% of industry assets, the industry’s total loan portfolio grew 10.5% year-over-year and topped $721.6 billion at year end. Notably, first mortgage loans outstanding posted near double-digit growth, increasing 9.2% annually.
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In addition to posting strong financial performance in mortgage lending, many credit unions strove to provide value to members and the local economy. For example, Orlando Federal Credit Union ($192.4M, Orlando, FL) is using Home Affordable Refinance Program (HARP) assistance to help members who are still dealing with residual blowback from the region’s housing crash. At Orlando FCU, first mortgage loans outstanding increased 12.3% annually, hitting $38.0 million as of Dec. 31, 2014. First mortgage originations also surged, growing 35.9% year-over-year to top $12.6 million in the fourth quarter of 2014. Notably, the credit union reports 0% first mortgage delinquency as of year end.
First mortgage originations
Data as of Dec. 31, 2014, for Orlando Federal Credit Union
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Source: Peer-to-Peer Analytics by Callahan & Associates