Credit unions continue to lean on real estate lending to try to bolster sagging loan growth, according to the most recent Credit Union Trends Report by CUNA Mutual Group.
"Loan growth has now slowed to 8.7% with real estate secured loans supplying over 75% of the gains on both annual and year- to-date basis," CUNA Mutual said in its September report, the most recent data available. "Our big concern is that the bulk of current lending results are directly tied to the housing sector, which has cooled significantly."
Unless there is a large sell-off of first mortgages in the fourth quarter, credit unions will exceed CMG's original 2006 loan growth forecast, but the firm is forecasting slower growth in 2007 due to there being less of a boost from real estate lending (though the firm also noted it expects to see less of a drag from vehicle loans).
"Total loan growth is not forecast to improve until 2008," CUNA Mutual said.
