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Economic Update
Wednesday, July 24, 2013 6:00 AM

Although average wages remain rather stagnant, Catalyst Strategic Solution’s Chief Strategist Brian Turner says recent improvement in average home values have helped the consumer recover the estimated $5-trillion in lost household net wealth during the past recession.

The latest survey by S&P/Cash-Shiller finds that the average home values have increased by 12.1 percent from one-year ago with each of the 20 metropolitan areas surveyed experiencing increases. In fact, nearly 60 percent of these markets reported double-digit increases.

According to Turner, this does two things:

  1. Helps to improve household net wealth.
  2. Remedies to some extent those homeowners who owed more on their financing that the market value of the home.

“This also helps credit union mortgage portfolios and potentially will lead to more modest loss provision expense,” notes Turner.

Over the past few quarters, credit unions have been able to offset lower marginal asset rates by improvements in delinquency and net charge-offs. Some, Turner says, have taken on the additional exposure of those loans which are “underwater” when it relates to market value.

“These types of improvements help to reduce that earnings exposure element,” Turner