TruStage Financial Services: Credit Union Mortgage Lending Rises Slightly

(Illustration courtesy of TruStage Financial Services)

Credit union fixed-rate mortgage lending rose 0.1% (seasonally adjusted annual rate) in April, according to TruStage Financial Services, Madison, Wis.

The rate is the second slowest in modern history, TruStage said in its Credit Union Trends report.

The report noted adjustable-rate first mortgage balances from credit unions fell 0.7% in April.

“Fixed-rate first mortgages now make up 82% of all credit union first mortgage loan balances, down from 85% last April, which was the highest in credit union history,” TruStage Financial Services Chief Economist Steven Rick said in the report. “This high proportion of fixed rate debt raises concerns for interest rate risk as market interest rates rise.”

TruStage noted the contract interest rate on a 30-year fixed-rate conventional credit union home mortgage rose to 6.99% in April, up from 6.82% in March and higher than the 6.34% reported in April 2023. “Mortgage interest rates rose over the last year as the Federal Reserve reduced its holdings of Treasury securities ($60 billion per month) and agency debt and agency mortgage-backed securities ($35 billion per month),” the report said.