MADISON, Wis. - Mortgage growth through May of this year is leading loan growth, which is up 2.8% overall after increasing 1% during May. Fixed-rate first mortgages grew 2.6%, according to analysis by CUNA, which said the 2.8% rise in loans outstanding year-to-date 2008, compares with a 1.6% rise for the comparable five-month period in 2007.
Credit union fixed-rate first mortgage loan balances rose 10.4% in the first five months of 2008, compared with 6% for the 2007 similar period, CUNA reported. CUNA Economist Steve Rick is projecting that credit unions will continue to pick up market share as home prices decline and the mortgage securitization market remains frozen.
Other loan drivers were home equities (1.8%), credit card (1.2%), and used auto loans (1%). Unsecured personal loans, ARMs, and new auto loans declined 0.7%, 0.5% and 0.3%, respectively, CUNA said.
CUNA said May is the fifth consecutive month in which used-auto loans as a percentage of total loans increased. During the same period, new-auto loans as a percentage of loans have decreased.
Credit union savings balances increased 1.9% in May, and are up 6.7% year-to-date, CUNA said, adding it is projecting savings balances will grow more than 10% due to tax rebates, a slowing economy, falling home prices, and further deleveraging of household balance sheets.
Money market accounts (2.9%), regular shares (2.5%), and individual retirement accounts increased, while one-year certificates declined 0.47%.
With savings growth outpacing loan growth, the loan-to-savings ratio decreased to 80.4% in May from 81.1% in April.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
