WASHINGTON -
In the case of Michael Werspuik, industry analyst for Callahan and Associates, when asked if the worst was over for the housing market, he chuckled and replied, “People have been saying we’ve hit the bottom for a little over the past year now.”
Werspuik pointed, however, to a “very positive” report released Dec. 31 showing existing home sales increased 0.4%. “This is a vast improvement over new home sales. Many believe we’ll see a rebound in the second half of 2008, if not early 2009.”
Credit unions for the most part, he noted, have not been caught up in the subprime mortgage market meltdown, and added that contrary to the expectations of some, credit unions are seeing an increase in mortgage activity. Callahan’s analysis shows as of the end of the third quarter 2007, first mortgage origination increased 8.5% over the past year.
‘Incredible Opportunity’
“There are a few reasons for this increase, but the main reason is many large mortgage lenders and banks are tightening lending standards,” Werspuik explained. “It is more difficult to get a loan today than a year ago. Meanwhile, since credit unions have not been affected by delinquency issues, they are picking up mortgage business. Credit unions now have an all-time high in the first mortgage market, 2.4%.”
Werspuik said he expects to see the same pattern continuing in 2008. As adjustable-rate loans reset, home owners will be looking to refinance, meaning “this is an incredible opportunity for credit unions” he said.
“Despite the doom and gloom we hear from other financial institutions, it is great for credit unions. Credit unions should let their members know they are available to help them. Even if they don’t offer first mortgages, credit unions offer credit counseling and other resources. The important part is being there for their members.”
Callahan has tracked significant growth in credit cards, and Werspuik predicted that trend should continue to be strong in 2008.
