Credit union mortgage originations drop for 2nd consecutive year

Home mortgage originations by US credit unions and application approval rates fell for the second year in a row, in line with all mortgage originations in 2023.

US credit unions funded $157.27 billion in home mortgages in 2023, down 22.3% from the previous year. The approval rate also fell, by 6.0 percentage points to 57.0%, according to recently released Home Mortgage Disclosure Act data compiled by S&P Global Market Intelligence on July 23.

The total number of home mortgages funded by credit unions declined 14.4% to 935,813.

Navy FCU's continuing lead

Vienna, Va.-based Navy FCU held onto its top spot as the credit union with the most home mortgage originations. It funded $14.83 billion in mortgages in 2023, nearly triple the credit union in second place, Raleigh, NC-based State Employees CU, which funded $5.39 billion of such loans.

Navy FCU also cracked into the top 20 mortgage lenders overall, landing at No. 19. Still, Navy FCU's total funded loans fell 21.2% from the prior year along with its approval rate, which dropped 3.3 percentage points to 41.4%.

State Employees CU's funded loans dropped 32.2% year over year, and its approval rate declined 6.5 percentage points to 62.3% over the period.

Boeing Employees CU bumped Pentagon FCU down the list to No. 3 with a total $3.54 billion in funded mortgages, a decrease of 28.3% from 2022. Its approval rate of 62.0% was 4.9 percentage points lower compared to the 2022 level.

Three Rivers FCU also moved above Pentagon FCU thanks to its 42.2% increase in funded loans. It was the only credit union to post an increase among the top 20 credit union mortgage originators.

All credit unions in the ranking except Three Rivers FCU funded fewer mortgages in 2023 versus 2022, in line with wider economic tightening, and all but two credit unions saw approval rates fall year over year.

Biggest movers

Among credit unions with over $100 million in funded loans, Connexus CU had the highest percentage increase in funded loans last year, up 980.0% from 2022. It funded $112.6 million in mortgages with an approval rate of 31.5%, a decrease of 48.1 percentage points from the previous year.

Avadian CU had the next biggest increase with a 207.7% rise, funding $162.9 million, as its approval rate jumped 6.4 percentage points from the prior year to 79.8%.

In third place, JSC FCU's funded loans increased 56.3% to $136.6 million in mortgages.

All 10 credit union mortgage originators with the biggest hikes in funded loans saw double-digit increases or more from the prior year, but only three of those had better loan approval rates in 2023.

Financial Partners CU posted the largest percentage decrease in mortgages funded from 2022, dropping 80.5% to $161.6 million. Its approval rate also dropped 13.0 percentage points to 49.7%. Logix FCU was No. 2 with a 77.0% decline in funded loans to $741.5 million, as its approval rate fell 11.4 percentage points to 64.9%.