Mortgages By The Numbers (4Q17)

Real estate lending continues to dominate the loan portfolio, with first mortgage lending taking the largest share.

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Total real estate loan balances increased 47.3% over the past five years 9.5% in the past 12-months alone and reached $478.7 billion as of Dec. 31, 2017. First mortgage loans continued to dominate in both real estate lending as well as general lending. These loans comprised 82.5% and 40.8%, respectively, of those portfolios.

Fixed-rate first mortgage loans accounted for 47.6% of the real estate loan portfolio as of Dec. 31, 2018.

First mortgage loans accounted for 40.8% of all credit union lending and captured the largest share of the loan portfolio in the fourth quarter of 2017.

Digging deeper into first mortgages, fixed rate loans held the highest share of the portfolio, with $228.0 billion in balances as of year-end. Balloon/hybrid loans followed at $108.4 billion, and adjustable rate mortgages came in third at $58.8 billion.


The share for fixed rate loans, however, has decreased 69 basis points year-over-year to 57.7%. The share of adjustable rate mortgages decreased by 43 basis points to 14.9% as of Dec. 31, 2017. Conversely, balloon/hybrid increased their share by 112 basis points to 27.4% at year-end.

Credit unions in every NCUA region held more than 50% of their first mortgage loans as fixed-rate loans. Credit unions in the Mid-Atlantic Region held the highest percentage of fixed-rate loans, 65.1%. Credit unions in the Central Region followed with 58.1%. The Western, New England, and Southeast regions followed with 57.3%, 55.1%, and 52.3%, respectively.

The Western NCUA region held the largest share of balloon/hybrid first mortgage loans, 36.6%.

The average first mortgage balance increased 4.0% year-over-year to $146,981 as of Dec. 31, 2017. As the average balance has increased, so, too, has first mortgage penetration. As of fourth quarter, the average first mortgage penetration rate was 2.39%, up 4 basis points year-over-year. Credit unions with $100 million to $250 million in assets had the highest first mortgage penetration rate, 2.63%. That was 12 basis points higher than credit unions with more than $1 billion in assets.

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Credit unions with $100 million to $250 million in assets reported an average first mortgage penetration rate of 2.63%, which is 24 basis points higher than the industry average.

Total real estate delinquency has continued to drop and was down 1 basis point from year-end 2016. Over the past five years, real estate delinquency has dropped 78 basis points, from 1.39% in Dec. 31, 2012, to 0.61% in Dec. 31, 2017.

Asset quality for first mortgage loans also has continued to improve. First mortgage delinquency dropped to 0.62% in the fourth quarter of 2017, down 1 basis point from 2016 and the lowest level since fourth quarter 2007. The first mortgage net charge-off rate also improved. It decreased 2 basis points year-over-year to 0.03% as of Dec. 31.

Real estate asset quality improved in 2017 and was down 1 basis point at year-end.

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April 23, 2018

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