Diversification involves investing in different products across various asset classes in order to reduce portfolio risk while maximizing the expected return. Although optimal portfolio diversification seems quite easy to achieve thanks to the wide variety of loan products available nowadays, it’s very important to consider a series of aspects in order to select the right loan products for your credit union’s portfolio and avoid the pitfalls of over diversification.
Manufactured Housing News
The number of home sales in the US rose unexpectedly in May 2020, exceeding both the number of homes sold in April 2020 as well as the home sales recorded during the same period last year. As most recent homebuyers purchased their homes with the help of a home loan, the home financing market looks solid in both the short and long term, despite the recent socio-economic uncertainty that has negatively affected the real estate industry. Thanks to historically low rates, credit union mortgage origination volumes have also risen, allowing credit unions to gain more market share.
According to CUNA, many credit unions have reported rising liquidity and lower loan origination volumes over the past few months. As this trend is expected to continue particularly due to the current government relief programs as well as a higher number of people looking for a safe place to keep their money, it could negatively affect the overall profitability of many credit unions.