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What To Consider When The Mortgage Market Shifts

What goes up must come down. It’s time for credit union and mortgage professionals to consider their next steps — before it’s too late.

The last 18 months have seen record volume amid record low interest rates. What goes up must come down. It’s time for credit union and mortgage professionals to consider their next steps before it’s too late.

Since January 2020, the housing market has experienced exponential growth like never before. Low interest rates, low housing inventory, and increased home ownership demand has led to unique challenges for most credit union and mortgage entities. Read more to understand how you can prepare for a market shift.

There has been an intense, laser-sharp focus on current production – on how to continue serving customers and members when the stakes are high, and the future is uncertain.

Quite a bit of dust has been kicked up , and mortgage professionals have stayed focused on what’s right in front of them to navigate their way through it.

But the question now is, What happens when the dust settles?

It’s not a question of if, but when. The dust will settle, and those that have looked beyond the dust to a clear, new future will be the ones well-positioned to succeed in the new norm.

Sustainability in uncertain times is born from asking the right questions and understanding that change is inevitable.

One change that is most likely to occur is the reduction in refinancing activity. The Mortgage Bankers Association predicts up to an 80% reduction in refinancing activity in the fourth quarter of this year which should have all of us reconsidering our next step.

So how can you be ready? What should you be considering?

Are you offering a wide range of products?

  • Is your product offering enough? Products like USDA, FHA, and VA loans can be additional sources of revenue. Credit unions that are nimble and adaptive enough to offer these types of products to reach all their members will have a competitive advantage.
  • What happens when the average American can’t afford housing? Credit unions should consider programs like down payment and low-income housing assistance to help members in unique financial situations.

Do you have the right technology and processes in place to position yourself, and your members not only today and in the future?

  • The ability to give your members the power they need to purchase the home they deserve in an ever-changing market requires powerful technology and a deep understanding of a seller’s market impact on you and your members.
  • You need the speed and adaptability that allows your members to close in three weeks because the reality is that if you can’t, the seller’s realtor knows they can, and many times will, move on to the all-cash offer losing your credit union the home loan and your member their dream home.

Can you identify where your members are in their home-buying journey?

  • It sometimes seems like the big guys can see around the corner. They have the data resulting from powerful business intelligence that positions them well for unclear times. The good news is that you can have that too. With the right technology and partner, you can begin to identify members just beginning their journey and use that information to meet them in meaningful ways before another company does.

Do you have the right partners in place?

  • Third-party partners like CUSOs empower credit unions to stay focused on what’s around the corner. They also offer variable cost structures, meaning a credit union only pays when a loan closes, enabling predictable staffing models along with other expenses. Many credit unions also consider third parties a great resource for offering wider product sets like FHA and VA loans, state-of-the-art mortgage technology, and business intelligence tools that complement their existing mortgage structure to generate additional home loan volume and revenue opportunities.

The past 18 months have brought significant growth and challenges. We know what goes up must come down. The reality is that, even in this exponential growth, credit unions have lost market share.

How can credit unions move from market share loss to maintaining market share and beyond?

By understanding that the dust will settle, by asking the right questions, and by partnering with powerful third parties that have them and their members front of mind.

Let’s connect to chat about how to be prepared when the market shifts.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
November 8, 2021

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