Mortgage originations are poised for continued expansion in , driven by a combination of easing mortgage rates, improving affordability, and sustained consumer demand, according to a new forecast from TransUnion. The projections, released on , indicate that both purchase and refinance activity will contribute to this growth, extending a recovery that began in prior years.
TransUnion’s forecast was released alongside its Q4 Credit Industry Insights Report (CIIR), which highlighted ongoing expansion in consumer lending at the end of . The report identifies mortgages and unsecured personal loans as the primary engines of projected growth in .
Purchase mortgage originations are expected to increase by 4.0% in , while refinance activity is projected to rise by 4.2%. This represents a continuation of the rebound from near-record low levels experienced in recent years. The forecast suggests that the factors driving this growth are interconnected: lower mortgage rates make homeownership more accessible, while improving affordability eases the financial burden on potential buyers. Sustained consumer demand, despite broader economic normalization, further supports this positive outlook.
However, the overall credit landscape is not uniformly positive. TransUnion notes that demand for other credit products shows mixed performance. Auto loan originations are expected to decline by −1.5%, while credit card originations are projected to grow by a more modest 2.0%. This divergence underscores a shift in consumer borrowing patterns, with a greater emphasis on housing-related credit.
Unsecured personal loans are also expected to perform well, with projected growth of 11.2% in . This would mark a third consecutive year of annual growth for this segment, indicating continued consumer appetite for flexible financing options. The initial projections for unsecured personal loans were revised upwards from 20.2%, reflecting updated data and analysis.
The broader trend, according to TransUnion, is one of moderate growth across most credit products, albeit at slower rates than those seen in . This normalization reflects a broader stabilization of the credit market as economic conditions continue to evolve. The company’s findings suggest that while consumer demand for credit remains robust, it is tempered by a more cautious economic environment.
Looking back, saw a significant contraction in mortgage originations, with purchase mortgages falling by −24.7% and refinances plummeting by −68.6%. marked the beginning of a recovery, with purchase mortgages increasing by 4.6% and refinances rebounding by 50.6%. continued this trend, with purchase mortgages growing by 2.3% and refinances rising by 28.1%.
The projected growth in mortgage originations is particularly noteworthy given the challenges facing the housing market in recent years. Rising interest rates and limited inventory have constrained affordability for many potential homebuyers. However, the forecast suggests that these headwinds are beginning to subside, creating a more favorable environment for housing-related credit.
The TransUnion report provides a valuable snapshot of the evolving credit landscape and offers insights into the factors shaping consumer borrowing behavior. While the overall outlook is positive, the company cautions that growth rates are expected to moderate as the market continues to normalize. The continued strength of the mortgage market, however, suggests that housing will remain a key driver of credit expansion in .
