How much should credit unions invest in their mortgage lending engine? The answer depends on the market they serve. Activity across the five NCUA regions varies, with credit unions taking advantage of different opportunities in different areas across the country.
To tease out what’s happening in what market, start with HMDA* data.
There are ample ways to slice and dice HMDA data to gain a deeper understanding of the market. Callahan & Associates uses MortgageAnalyzer to analyze how the country as well as individual NCUA regions are performing in key mortgage metrics. Here’s a look at one.
Both the credit union industry and the national housing market have grown significantly since HMDA data was last released. At $130.4 billion, credit union first mortgage originations comprised 6.0% of the $2.2 trillion U.S. housing market in 2016.
The number of mortgage originations by credit unions increased 15.4%. And although credit union origination market share dropped 14 basis points from the year prior, in human impact, those originations represent 758,762 new mortgage loans funded by the cooperative industry.
Use the drop-down menu in the graph above to sort the data among all U.S. credit unions.
Credit union mortgage originations in the New England Region increased 18.8% over the year prior. Credit unions here captured the largest market share, 9.7%, of any NCUA region. The region was also the only one to increase regional origination market share, which was up 31 basis points year-over-year.
On a more focused scale, credit unions in six of the region’s nine states posted double-digit market share in 2016. Vermont led the group with 24.0%.
In terms of dollars and cents, New England credit unions originated $27.0 billion. All mortgage-originating financial institutions in the region originated $279.2 billion.
The success of credit unions in the New England Region resulted in 111,055 members receiving financing for their homes, an 11.6% annual increase.
Use the drop-down menu in the graph above to sort the data among all credit unions in the NCUA’s New England region.
The Western Region had the largest demand for mortgage lending in 2016. Credit unions there closed out 2016 with $41.4 billion in originations that’s a 16.0% increase over the year prior. The market share for credit unions in this region, however, dropped 28 basis points to 5.5%.
At 25.3%, market share for Alaska credit unions was the highest of any state in the country, even though market share for credit unions in The Last Frontier has dropped 3.2 percentage points since 2015. Idaho was the only state in the Western Region where credit unions increased market share. Market share for Gem State credit unions was up 81 basis points year-over-year.
Overall, credit unions in the Western Region funded 330,627 new first mortgage loans in 2016.
Use the drop-down menu in the graph above to sort the data among all credit unions in the NCUA’s Western region.
All financial institutions in the NCUA’s Central Region originated a total of $435.4 billion in mortgage loans. Credit unions alone accounted for $24.2 billion of those loans.
Although credit union market share decreased 15 basis points to 5.5%, financial cooperatives in the Central Region originated 12.8% more mortgage loans than they did in 2015.
Iowa credit unions posted the largest increase in market share of any state in the country. Credit union market share in the Hawkeye State was up 2.7 percentage points year-over-year to 19.5%.
Overall, Central Region credit unions originated 189,158 new mortgages in 2016, a 10.7% increase over the year prior.
Use the drop-down menu in the graph above to sort the data among all credit unions in the NCUA’s Central region.
Credit unions in the NCUA’s Southeast Region originated $21.8 billion in mortgage loans in 2016. That’s an 18.7% increase from year-end 2015. Total mortgage loans for the region increased at a similar rate across all lending groups, so market share remained steady at 5.5% for credit unions.
Seven of the region’s 12 states recorded market share growth from 2015 to 2016. The 61.4% YOY increase in originations for Kentucky credit unions underpinned a 1.5-percentage-point increase in market share to 5.5%.
Southeastern credit unions funded 223,694 new mortgage loans in 2016, with total mortgage volume in the region reaching nearly 2 million.
Use the drop-down menu in the graph above to sort the data among all credit unions in the NCUA’s Southeast region.
Mid-Atlantic credit unions reported an 8.3% annual increase in mortgage originations, and total funded balances approached $16.0 billion. Origination market share, however, decreased 30 basis points to 5.1%. Total mortgage originations, including those at banks and other mortgage finance institutions, increased 14.5% over the same period.
On a more intimate scale, credit unions in New Jersey funded 2.5% of the state’s mortgage loans; however, the Garden State’s credit unions recognized the largest year-over-year increase in market share for the region. That was up 46 basis points.
Market share for banks in the Mid-Atlantic Region decreased 2.5 percentage points. Market share dropped to 49.5% as consumers in the region turned to mortgage finance companies for their home lending needs.
For members, credit unions in the Mid-Atlantic Region made 119,115 new mortgage loans. That’s a 10.7% increase over 2015.
Use the drop-down menu in the graph above to sort the data among all credit unions in the NCUA’s Mid-Atlantic region.
Make The Most Of HMDA Data
Leveraging HMDA data, MortgageAnalyzer helps credit unions identify market leaders and analyze their performance against other credit unions, banks, and mortgage lenders.
*The Federal Financial Institutions Examination Council released 2016 HMDA data earlier last month. The Home Mortgage Disclosure Act applies to credit unions, banks, and mortgage finance companies that originate mortgage loans and have more than $44 million in assets, and HMDA data sheds light on the mortgage market across states, communities, and neighborhoods.