Quarterly Totals Are In

Last week, Callahan & Associates had their quarterly Trend Watch call. It’s where they give updates on the industry performance based on call report data. It’s always interesting to see how Credit Unions are doing, but I often move right to the mortgage info.

The graph below shows that the quarter had some interesting results.

 

Q1 2014 market share

First, Credit Unions saw their quarterly production fall by 24% from the end of the 4th quarter and 44% from the same period a year ago. OUCH! Total production was just $17.5 billion – the lowest total since $18 billion in the second quarter of 2010.

But when you consider the total market fell by 23% quarter to quarter and 57% year to year, our numbers don’t look so bad.

All of this resulted in Credit Unions capturing a market share of 7.7% for the 1st quarter of the year. This is almost identical to the prior quarter and up over 1% from the same period one year ago. So it seems we Credit Unions are holding our own. Congratulations!

Rising interest rates resulted in the end of the refinance boom and almost every lender had a decline in the production. Also, the miserable winter experienced by much of the country had few people looking to buy homes. On a national basis, according to the MBA Finance Forecast, the dollar amount of refinance loans dropped by a staggering 71% from the 1st quarter 2013, and even purchase business fell, though by a more reasonable 15%.

The MBA is predicting that total production for the rest of the year will be between $250 billion and $300 billion per quarter and that total production will barely exceed $1 trillion. Last year, there was $1.75 trillion done.

So the market is smaller and it’s more dependent on purchase business. The good news is: Summer seems to be here. Home prices are slightly increasing across the country. Rates are still relatively low. Credit Unions are using their balance sheets to lend to members. Big banks continue to layoff large numbers of folks in mortgage lending. All of this creates great opportunity for Credit Unions to grow market share thereby helping more members and being memberlicious! So keep up the good work and help some more members buy homes!

One thought on “Quarterly Totals Are In

  1. Thank you Tim for always providing great info and looking at the positives! I know many of our credit unions definitely experienced some issues due to weather. The best part is we can see how much effort they are putting into their puchase loan initiatives. I was on a call as a guest speaker recently with some of the largest originators in banking. I didn’t know my audience initially for the call but it was very interesting as they are looking at ways they can capture more purchase business from escaping after application.

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