Credit Unions Gain Share in Autos, Lose It in Mortgages

Credit unions were able to expand their share of the nation’s pool of auto loans last year, but lost share in mortgages.

CUNA’s Monthly Credit Union Estimates released Wednesday showed credit unions held $493.1 billion in total automobile loans as of Dec. 31, up 20.2% from a year earlier and up 3% from Sept. 30.

The Fed’s G-19 Consumer Credit Report released Tuesday showed other lenders and investors held $922 billion in car loans Dec. 31, up only 2% from a year earlier and 0.4% from Sept. 30.

As a result, credit unions’ share of the nation’s total automotive debt ended the year at 34.8%, up from 31.2% a year earlier and 34.3% on Sept. 30.

Credit unions’ share was only about 25% in 2015. It rose to a high of 32.6% by the end of 2018 and fell to a low of 30.1% in June 2021 before setting new records in June and September last year.

New car loans grew 21.6% to $175.1 billion in December from a year earlier and up 1.1% from Nov. 30, compared with an average December gain of 0.7%.

Used car loans grew 19.4% to $318 billion from a year earlier and up 0.6% from Nov. 30, compared with an average December gain of 0.4%.

Cox Automotive estimated that dealers sold new cars at a seasonally adjusted annual rate of 13.2 million in January, down from 13.4 million a year earlier but up from 11.5 million in December.

A month ago, Cox Automotive forecast total new car sales (including fleet) to rise 2% to 14.1 million vehicles in 2023, after falling 8% to 13.9 million last year. Used cars will fall 2% to 35.6 million vehicles this year after falling 11% last year.

While credit unions gained share in a shrinking market last year, they lost share in the falling mortgage market.

The Mortgage Bankers Association estimated that first-mortgage balances were $13.33 trillion as of Sept. 30 among all U.S. lenders, up 6.3% from a year earlier.

At credit unions, CUNA estimated first-mortgage balances fell 2.8% to $565.3 billion as of Dec. 31. That would mean credit unions held 4.2% of all mortgages. While their share was unchanged from Sept. 30, it was down from 4.6% a year earlier and a peak of 4.8% at the end of 2020.

On Wednesday, the MBA reported that mortgage applications in the week ending Feb. 3 rose 7.4% from a week earlier. The MBA’s Refinance Index increased 18% from the previous week and was 75% lower than the same week one year ago. Its seasonally adjusted Purchase Index increased 3% from one week earlier.

Joel Kan, the MBA’s deputy chief economist, said both purchase and refinance applications have shown gains in three of the past four weeks because of lower rates.

“Applications rose last week as the 30-year fixed mortgage rate inched lower to 6.18%, its fifth consecutive weekly decline. The 30-year fixed rate is almost a percentage point below its recent high of 7.16% in October 2022,” Kan said.

Overall applications remained 58% lower than a year ago and rates are still significantly higher, he said.

“However, this week’s results are a step in the right direction,” Kan said. “Purchase activity that was put on hold last year due to the quick runup in rates is gradually coming back as rates ease and housing demand remains strong, driven by supportive demographics and the ongoing strength in the job market.”

As reported previously, the Fed’s G-19 showed credit unions increased their share of the nation’s credit card debt to 6.3% at year’s end, unchanged since September, but up from 6.2% in December 2021. Banks gained even more share as the share dwindled among finance companies and others.

CUNA’s report showed the nation’s 4,936 credit unions had 138 million members as of Dec. 31, up 4.5% from a year earlier and up 0.3% from the previous month. The report also showed:

• Savings were $1.88 trillion, up 3.2% from a year earlier and up 0.4% from Nov. 30.
• Savings per member were $13,608, down 1.2% from a year earlier and up 0.1% from Nov. 30.
• Total loans were $1.54 trillion, up 19.4% from a year earlier and up 1.1% from Nov. 30.
• Loans per member were $11,131, up 14.3% from a year earlier and up 0.8% from Nov. 30.
• The 60-day-plus delinquency rate was 0.58% as of Dec. 31, compared with 0.48% a year earlier and 0.56% a month earlier.