Wednesday, December 1, 2021

New-home sales saw a slight increase of 0.4% in October

ARLINGTON, Va.—New-home sales saw a slight increase of 0.4% in October to 745,000 annualized units, while prior months saw a downward revision of 75,000 units. Compared to last year, October sales were 23.1% lower, according to new data.

Curt Long

“New home sales advanced by a modest amount in October, and those gains were swamped by downward revisions to prior months,” said NAFCU Chief Economist and Vice President of Research Curt Long. “The initial September sales estimate was downgraded from 800,000 to 742,000 units.”

October sales in the Midwest rose by 11%, followed by the South (+0.2%). Other Census regions saw a dip in new-home sales including the Northwest, which fell by 11.8%, and the West, which dropped by 1.1%.

Based on current month sales, the new federal data show there were roughly 6.3 months of supply in October, up by 0.2 months compared to September. Unsold homes left on the market increased by 10,000 homes to 389,000 in October, representing a 37% increase from year-ago inventory levels.

Sentiment Remains ‘Solid’

“Homebuilders are dealing with labor and supply shortages, and there are many reports of builders slowing sales through the difficulties. Homebuilder sentiment was solid in October, and rose in November to its highest level since the spring,” noted Long. “New home inventory levels are keeping pace with sales, and price increases have slowed lately.”

Of note, the median home price on a non-seasonally adjusted basis rose by 0.7% in October to $407,700, which is 17.5% higher than last year.

“Construction permits peaked in January and have since settled a bit lower, though still above pre-COVID levels,” concluded Long. “Until the supply chain unkinks, production and sales of new homes are likely to remain modest, which will maintain price pressures in the resale market.” 

CU Today

Monday, November 29, 2021

Consumers Lack Understanding of Real-Time Payments

Misperceptions are steering consumers toward non-bank payment apps, but CUs can win them back, new Javelin research finds.

Getting paid and paying others in real-time is a benefit that consumers want in their lives. But they may not fully understand what real-time payments are, how they work or who actually offers them, according to a new white paper produced by Javelin Strategy & Research and commissioned by the Brookfield, Wis.-based core processor and fintech Fiserv.

That’s keeping credit unions and other financial institutions from reaching their full potential in the real-time payments services space, according to the paper, as consumers’ misperceptions are steering them toward nonbank payment apps such as PayPal’s Venmo and Square’s Cash App.

The white paper, based on a June 2021 survey of 3,711 consumers, revealed that 60% of people do not believe that “real-time payments” are truly instantaneous, mistakenly thinking that “money will not be available for hours or even days, influenced by factors such as bankers’ hours, bank policies, industry limitations, and weekend and holiday delays.”

In addition, 44% of respondents said they believed Venmo and Cash App provided instant access to funds in their bank account when they in fact do not. The capabilities of the Zelle real-time payments network, however, can be integrated into a financial institution’s app and provide instant access to funds in the recipient’s bank account, and only 50% of consumers are aware of Zelle’s advantage.

Notably, among Gen Z respondents, 42% have adopted Cash App, 27% have adopted Venmo and just 13% have adopted Zelle.

The response from credit unions, according to the paper, should be to integrate real-time payment capabilities such as Zelle’s and educate members – especially young members – about how they work. Credit unions have much to gain from embracing real-time payment capabilities, including increased member engagement and stronger member relationships, and a reduced risk of losing member transactions to nonbank payment apps, the report noted.

“By integrating with real-time networks like The Clearing House’s RTP network or tapping into Zelle’s ability to make speedy payments, financial institutions have the opportunity to bolster their appeal to consumers,” the report stated. “They must take these steps to stave off threats from payments platforms like PayPal’s Venmo and Square’s Cash App.”

Convincing consumers of the benefits of real-time payments is not necessary, according to the paper – 75% of respondents of all ages said they feel it’s important to be able to receive funds and access them instantly. That importance appeared to decrease with age, with 90% and 93% of Gen Z and Gen Y respondents agreeing with that statement, respectively, followed by 82% of Gen Xers and 52% of baby boomers.

Javelin and Fiserv listed six recommendations for financial institutions to succeed in the real-time payments area:

  • Accelerate investments in real-time money movement;
  • Build out real-time payments in bill pay and interbank transfers;
  • Improve the consumer experience of using real-time payments;
  • Use the speed of real-time payments to strengthen financial fitness tools;
  • Refocus marketing to counter misperceptions about real-time payments; and
  • Raise awareness of real-time networks like Zelle among Gen Z.

“Offering instant payment capabilities is now table stakes for financial institutions,” Javelin Director of Digital Banking Mark Schwanhausser stated in a news release about the paper. “The opportunity for banks and credit unions to win customers in this space will hinge on their ability to deliver and differentiate their offerings from nonbank apps.”

Natasha Chilingerian

3 Federal Regulators Issue Statement, Roadmap Related to Future Work With Crypto-Assets

WASHINGTON–Three federal bank regulatory agencies today issued a statement summarizing their interagency "policy sprints" focused on crypto-assets and providing a roadmap of future work related to crypto-assets.


The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency noted that the statement specifically describes the focus of the preliminary work conducted through the sprints undertaken by the agencies.

It also summarizes the agencies' plan to “provide greater clarity throughout 2022 on whether certain crypto-related activities conducted by banking organizations are legally permissible, and related expectations for safety and soundness, consumer protection, and compliance with existing law and regulations,” the agencies said.

“The emerging crypto-asset sector presents potential opportunities and risks to banking organizations, their customers, and the overall financial system,” according to the agencies. “The interagency sprints quickly advanced and built on agencies' combined knowledge, which helped identify and assess key issues related to potential crypto-asset activities conducted by banking organizations.”

The full statement can be found here.