Consumers will be turning to credit unions more and more in 2014, a new survey of credit unions members concluded this week.
But when it comes to mortgage lending, credit unions are not as optimistic about this particular aspect of their business in the coming year, according to a study published by the National Association of Federal Credit Unions.
In the latest Economic & Credit Union Monitor, NAFCU forecasted a projected 1.1 billion in mortgage originations for next year, down from an estimated 1.750 billion in 2013.
The refinancing share of all mortgage activity also is expected to fall from an estimated 60% of all apps in 2013 to 40% next year, based on data from NAFCU’s report.
But despite mortgage lending expected to shift somewhat, credit unions are much more optimistic about 2014 overall.
Member growth at credit unions surveyed by NAFCU grew 5.6% in October, while still increasing 5.5% over last year.
"We are seeing a lot of new membership," said NAFCU chief economist Dr. David Carrier.
Membership grew in 2013 and what’s surprising to Dr. Carrier is that credit unions answering the survey "are expecting (growth) to be even stronger in 2014."
As for what’s causing it, he offers anecdotal evidence of younger members coming in after growing discouraged with larger commercial banks.
After the Bank Transfer Day movement launched, many young people unaware of credit unions started to sign up, he said.
Overall, loan growth – including credit cards, vehicles and other real estate loans – is projected to grow in 2014 even if mortgage activity and used car loans may fall a bit short.
Meanwhile, respondents said year-over-year member growth hit 3.5% in September and is expected to rise as high as 5% in 2014.
As for the economy, NAFCU members surveyed forecasted modest economic improvements next year, with NAFCU predicting 2.6% gross domestic product growth, 7% unemployment and a 5% interest rate for 30-year mortgages.