TransUnion Finds Consumer Credit Appetite Remains High

(Illustration courtesy of TransUnion)

The consumer credit market remains resilient in the face of a challenging economic environment, according to TransUnion, Chicago.

TransUnion’s first-quarter Credit Industry Insights Report noted delinquencies continue to rise across a number of credit products, with increases seen in credit cards, mortgages and auto.

“We have seen delinquencies tick up in recent quarters, which is certainly something lenders need to follow closely,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “At the same time, the consumer credit market remains resilient given the compounding of relatively high interest rates and persistent inflation. The prevailing hope is that as long as unemployment figures remain relatively low, serious delinquency rates may stabilize.” 

The report said the purchase share of mortgage originations hit a record in the first quarter as interest rates remain high. “Fourth-quarter 2023 origination volumes were down 11% year-over-year, with originations continuing to be driven by purchase originations,” TransUnion said. “While overall volumes were down year-over-year, FHA mortgage originations were up 9% YoY in Q4 2023, the first loan type to register a year-over-year increase in two years.”

Mortgage delinquencies continue to trend up, the report said. 60-plus day past due consumer-level delinquencies were up to 1.14% in the first quarter 2024; however, delinquencies still remain below pre-pandemic rates.

The 2022 resurgence in home equity lending slowed somewhat in late 2023, with HELOCs down 17% and HELOANs down 4% year-over-year. Generation X and Baby Boomers have the highest share of HELOC originations at 39% and 30%, respectively, in the fourth quarter. These same generational groups lead the way with 35% and 30% of HELOANs, respectively, during the quarter, TransUnion said.