ARLINGTON, Va.–Even as the White House introduces updated relief for those behind on their mortgages due to COVID-19 (see related story), one credit union economist isn’t expecting CUs to feel much of the brunt of expiring moratoriums on evictions.
“We have asked our members, ‘When the end of mandatory forbearance periods come to a close, do you anticipate much of an impact on your mortgage loan portfolio with foreclosures?’” said NAFCU EVP and Chief Economist Curt Long. “By and large our members have said it’s not going to be a huge event for them. I think it is a bit of a blind spot (over what the end of moratoriums will mean), which is why they are being cautious on the policy making side. But our members are pretty optimistic that they will be able to surmount any challenges.”
Sustainable? No
Meanwhile, as CUToday.info reported here, home prices at the end of June were up 23% year-over-year, according to new data from the National Association of Realtors.
“Is it sustainable? That’s an easy one. I can’t see that sustaining too much longer,” said Long, noting he has personally been doing some home shopping and Realtors have told him the frenzy is beginning to die down a bit. “That’s starting to show up in the data, as well. As we go further into 2021, we will start to see that number start to die down a bit. It will start to cool.
“The 2020 HMDA data shows purchase volume has been pretty flat. The big growth credit unions have experienced has been from refinancings,” said Long. “I expect that to continue. We still see some pretty flat purchase volume. But on the refi side it had been slowing considerably and that’s why overall loan growth was starting to slow. Now with rates starting to head south again, we could see the refi volume start again.”