"It's going to take a while to get those 11 million jobs back," said Rick, who spoke on the final day of the American Credit Union Mortgage Association's virtual two-day conference.

Steven Rick

Rick said he expects it will take two to three years before unemployment falls below 4.5% — what some economists consider a "natural" unemployment rate. He forecast the unemployment rate to fall from 8% in the third quarter to 7.5% in the fourth quarter. The annual averages will be 7.5% for 2020 and 6.5% for 2021.

His prediction was rosier than it was in April, when he predicted unemployment would peak at 25% in June, rivaling the 1933 peak during the Great Depression.

Jobs recovered slowly after the Great Recession of 2007-2009. Unemployment peaked at 10% in October 2009, four months after the recession's official end. It took until January 2013 before the rate remained consistently below 8%. It remained under 5% from October 2016 through March 2020.

Differences from the Great Recession include housing prices that have continued to rise, compared with the plummet in values as the housing bubble burst in 2007. A related difference is the absence of the Great Recession's foreclosure crisis.

As homeowners have rising equity, keeping up with mortgage payments becomes a priority.

"It's a completely different housing market this time," Rick said.

Existing home sales are back to levels not seen since 2006, a year before the start of the Great Recession, and 30-year mortgage rates are likely to remain low for the next two to three years.

"That means the refi boom, which is taking place at credit unions right now, will probably go through next summer, if not longer," Rick said.

The boom in refinances for all U.S. lenders started in the second quarter of 2019 and has lingered through past forecasts by the Mortgage Brokers Association in Washington, D.C. The MBA's Sept. 18 forecast showed refinances rose four-fold to $580 billion in the three months ending June 30, while purchase mortgages fell 2% to $348 billion.

The MBA predicted that the pace of refi growth is slowing to 63% this quarter and 8% in the fourth quarter. It said it expects the value to fall 14% in the first quarter and then 64% to 65% for each of the remaining quarters of 2021.

Purchase mortgages change more slowly and are expected to rise 9% this quarter, 21% in the fourth quarter and 28% in 2021's first quarter before tapering off and falling.

Refinances' share of total originations will fall from a high of 61% in this year's second quarter to 28% by the third quarter of 2021, according to the MBA.

Rick said one effect of the refi boom at a time of growing home prices is that they have sucked the life out of other loans as consumers have often used cash-outs to pay off home equity lines, car loans and credit cards.

Record increases in credit union savings balances will slow, but consumers are likely to be better savers, trying to maintain cushions to cover three to six months of expenses, he noted. As a result, they will spend less on consumer goods. "That means slower economic growth," Rick said.

Drops in net interest margins will be the main force reducing returns on average assets, which Rick and CUNA economists said they expect to fall to 0.50% for 2020 and 0.35% for 2021.

Some ROA will be also be shaved by loan forbearances and fee waivers, but Rick said helping members now will pay off with stronger loyalty when members are better able to borrow.

"Capital is our members' money," he said. "Capital is what we've extracted from them in net income over the last few years. Capital is your members' insurance for a rainy day.

"Guess what? It's raining."