TransUnion: Consumer Outlook Mixed in Q2

(Image courtesy of TransUnion; Breakout image courtesy of Burst/pexels.com)

TransUnion, Chicago, released its Consumer Pulse Study for the second quarter, finding consumer concerns about inflation and interest rates have hit their highest levels in two years. However, more than half of Americans remain optimistic about their household finances over the next year.

About half of Americans surveyed ranked inflation on daily goods as their top financial concern, with 84% ranking it as a top-three concern. That’s the highest level since TransUnion began asking the question two years ago.

The other top three financial concerns were housing prices (whether mortgage or rent) at 47% and interest rates at 46%.

However, 55% are optimistic about their household finances over the next year, with 47% believing their incomes will increase over that time frame.

With those housing prices and interest rates in mind, fewer consumers may be seeking mortgages over the next year, TransUnion noted.

Of the respondents who plan to apply for new or refinance existing credit in the next year, only 14% said they would apply for a mortgage, compared with 21% in the second quarter of 2023.

Regionally, those answers did vary–consumers in the West (19%) were more likely than those in the Midwest (11%) and South (13%) to say they plan to apply for a new mortgage.

Fifty-nine percent of those respondents seeking to expand their credit plan to apply for a new credit card, the highest intent level TransUnion has on record.

“Consumers are facing distinct challenges when taking into account today’s high inflation and interest rate environment. From filling up a tank of gas to making a rental payment to buying groceries, most consumers are paying more today for everyday expenses than they ever have. And if they’re using a credit card to make these purchases, their interest rates are at much higher levels, so costs also are rising for those consumers carrying a balance,” said Charlie Wise, Senior Vice President and Head of Global Research and Consulting at TransUnion. “Despite these challenges, the majority of consumers remain optimistic about their finances. With low unemployment and healthy wage gains, consumers continue to feel good about their future prospects–with the youngest generations leading the way.”

The online survey of 3,000 adults was conducted April 29–May 8, 2024 by TransUnion in partnership with third-party research provider, Dynata.