Mortgage rates have defied market expectations and trended downward this year. According to Freddie Mac, the 30-year fixed-rate mortgage rate inched up to 4.16% as of September 2014. This is 27 basis points lower than rates in the beginning of the year and 33 basis points lower than where it was last September.
Consumers are taking advantage of these low rates and many credit unions are reporting solid growth in first mortgages. For example, outstanding first mortgage loans surged 15.9% year-over-year at Wright-Patt Credit Union ($3.0B, Beavercreek, OH). According to FirstLook data collected and analyzed by Callahan & Associates, first mortgages at Wright-Patt topped $489.4 million as of September 2014.
The 199.5% annual growth in outstanding adjustable rate mortgages primarily contributed to the double-digit growth in Wright-Patt Credit Union’s first mortgage portfolio. Notably, the credit union achieved this growth despite selling $260.2 million in first mortgages to the secondary market in the third quarter. What’s more, it reported $702.9 million in first mortgage originations in the third quarter of 2014. That’s a 16.0% year-over-year increase.
FIRST MORTGAGE LOANS OUTSTANDING
Data as of September 30, 2014, for Wright-Patt Credit Union
© Callahan & Associates | www.creditunions.com
Source: Peer-to-Peer Analytics by Callahan & Associates
It will be interesting to see how the Federal Reserve's cessation of asset purchases will affect the future housing market and the mortgage business for credit unions going forward.
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