MADISON, Wis. (1/24/13)--Credit unions are poised to capture an increased share of an improved housing market in 2013--and establish themselves as the primary financial institution (PFI) of choice for American consumers.
Mortgage loans have long been considered as necessary to become a PFI. The increase goes hand in hand with the Credit Union National Association's communications strategy for 2013 is to encourage more Americans to choose credit unions as their best financial partner. (For a related News Now story, read A closer look: CUNA 2013 communications goal, lead folks to CUs as primary FI partner)
Home sales are expected to continue to rise after reaching their highest level in five years in 2012 (USA Today Jan. 23). Existing home-sales rose 9.2% last year. The National Association of Realtors Housing Affordability Index reached a record high of 198.2 November and is expected to go higher, indicating stronger household purchasing power, NAR said.
Credit unions already have captured the wave in the rising mortgage market. Credit union first mortgage originations increased 36% January through September, according to CUNA Economics and Statistics. CUNA economists expect credit union first mortgage originations to reach a record high--exceeding $100 billion in 2012.
Mortgage service providers say they are seeing more credit unions offering mortgages. CU Members Mortgage, which provides mortgage services to credit unions, signed 53 new credit unions clients in 2012 and its credit unions increased originations by 37% from 2011. In 2012, it saw a 47% increase in refinances since 2011. Purchases rose 15% during the same period.
Among the credit unions preparing for continued growth in 2013 is Partners FCU, a $1.1 billion credit union in Burbank, Calif. It partnered with CU Realty Services to offer tools that make it easier for members to buy and sell their homes.
From Partners FCU's website, members will research neighborhoods, estimate payments and find qualified real estate agents. The partnership positions the credit union as its members' first point of contact in the real estate transaction.
Consumers CU, with $430 million in assets in Oshtemo, Mich., is participating in a program designed to make home ownership more affordable for Michigan residents. First-time homebuyers in Michigan may be eligible for grants up to $5,000 through the Michigan State Housing Development Authority's Homebuyer Assistance grant program. Michigan has allocated $15 million to the grant program.
"We encourage all who feel they may qualify to contact us," said John Murphy, Consumers CU mortgage department manager. "We can then determine each homebuyer's needs to see if this beneficial grant program may work for them."
And by working with members on such a significant purchase, credit unions may become their members' PFI.